Correlation Between Walker Dunlop and Security Bank
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Security Bank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Walker Dunlop and Security Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Security Bank Corp, you can compare the effects of market volatilities on Walker Dunlop and Security Bank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Walker Dunlop with a short position of Security Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Security Bank.
Diversification Opportunities for Walker Dunlop and Security Bank
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and Security is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Security Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Bank Corp and Walker Dunlop is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Walker Dunlop are associated (or correlated) with Security Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Bank Corp has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Security Bank go up and down completely randomly.
Pair Corralation between Walker Dunlop and Security Bank
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.6 times more return on investment than Security Bank. However, Walker Dunlop is 1.66 times less risky than Security Bank. It trades about 0.05 of its potential returns per unit of risk. Security Bank Corp is currently generating about -0.06 per unit of risk. If you would invest 10,870 in Walker Dunlop on September 1, 2024 and sell it today you would earn a total of 148.00 from holding Walker Dunlop or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Security Bank Corp
Performance |
| Timeline |
| Walker Dunlop |
| Security Bank Corp |
Walker Dunlop and Security Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Security Bank
The main advantage of trading using opposite Walker Dunlop and Security Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Security Bank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Security Bank will offset losses from the drop in Security Bank's long position.| Walker Dunlop vs. Mr Cooper Group | Walker Dunlop vs. Velocity Financial Llc | Walker Dunlop vs. Security National Financial | Walker Dunlop vs. Encore Capital Group |
| Security Bank vs. Metropolitan Bank Trust | Security Bank vs. Philippine National Bank | Security Bank vs. Asia United Bank | Security Bank vs. Philippine Savings Bank |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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