Correlation Between Walker Dunlop and Southern Cross
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Southern Cross 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 Southern Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Southern Cross Gold, you can compare the effects of market volatilities on Walker Dunlop and Southern Cross 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 Southern Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Southern Cross.
Diversification Opportunities for Walker Dunlop and Southern Cross
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and Southern is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Southern Cross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Cross Gold 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 Southern Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Cross Gold has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Southern Cross go up and down completely randomly.
Pair Corralation between Walker Dunlop and Southern Cross
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 6.25 times less return on investment than Southern Cross. But when comparing it to its historical volatility, Walker Dunlop is 2.79 times less risky than Southern Cross. It trades about 0.05 of its potential returns per unit of risk. Southern Cross Gold is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 95.00 in Southern Cross Gold on September 3, 2024 and sell it today you would earn a total of 201.00 from holding Southern Cross Gold or generate 211.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Walker Dunlop vs. Southern Cross Gold
Performance |
| Timeline |
| Walker Dunlop |
| Southern Cross Gold |
Walker Dunlop and Southern Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Southern Cross
The main advantage of trading using opposite Walker Dunlop and Southern Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Southern Cross 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 Southern Cross will offset losses from the drop in Southern Cross' 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 |
| Southern Cross vs. Aspire Mining | Southern Cross vs. COAST ENTERTAINMENT HOLDINGS | Southern Cross vs. ABACUS STORAGE KING | Southern Cross vs. Andean Silver Limited |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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