Correlation Between Walker Dunlop and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Sterling Capital 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 Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Sterling Capital Mid, you can compare the effects of market volatilities on Walker Dunlop and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Sterling Capital.
Diversification Opportunities for Walker Dunlop and Sterling Capital
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Walker and Sterling is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Sterling Capital Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Mid 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Mid has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Sterling Capital go up and down completely randomly.
Pair Corralation between Walker Dunlop and Sterling Capital
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.27 times more return on investment than Sterling Capital. However, Walker Dunlop is 2.27 times more volatile than Sterling Capital Mid. It trades about 0.05 of its potential returns per unit of risk. Sterling Capital Mid is currently generating about 0.04 per unit of risk. If you would invest 7,629 in Walker Dunlop on August 30, 2024 and sell it today you would earn a total of 3,453 from holding Walker Dunlop or generate 45.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Sterling Capital Mid
Performance |
| Timeline |
| Walker Dunlop |
| Sterling Capital Mid |
Walker Dunlop and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Sterling Capital
The main advantage of trading using opposite Walker Dunlop and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital'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 |
| Sterling Capital vs. Fundamental Large Cap | Sterling Capital vs. Dunham Large Cap | Sterling Capital vs. Qs Large Cap | Sterling Capital vs. Dodge Cox Stock |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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