Correlation Between Walker Dunlop and State Street
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and State Street 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 State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and State Street Target, you can compare the effects of market volatilities on Walker Dunlop and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and State Street.
Diversification Opportunities for Walker Dunlop and State Street
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and State is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and State Street Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Target 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Target has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and State Street go up and down completely randomly.
Pair Corralation between Walker Dunlop and State Street
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.34 times less return on investment than State Street. In addition to that, Walker Dunlop is 2.84 times more volatile than State Street Target. It trades about 0.05 of its total potential returns per unit of risk. State Street Target is currently generating about 0.32 per unit of volatility. If you would invest 1,547 in State Street Target on September 1, 2024 and sell it today you would earn a total of 61.00 from holding State Street Target or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Walker Dunlop vs. State Street Target
Performance |
| Timeline |
| Walker Dunlop |
| State Street Target |
Walker Dunlop and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and State Street
The main advantage of trading using opposite Walker Dunlop and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street'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 |
| State Street vs. State Street Target | State Street vs. State Street Target | State Street vs. Ssga International Stock | State Street vs. State Street Target |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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