Correlation Between Walker Dunlop and Beijing Tong
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Beijing Tong 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 Beijing Tong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Beijing Tong Ren, you can compare the effects of market volatilities on Walker Dunlop and Beijing Tong 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 Beijing Tong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Beijing Tong.
Diversification Opportunities for Walker Dunlop and Beijing Tong
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and Beijing is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Beijing Tong Ren in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Tong Ren 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 Beijing Tong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Tong Ren has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Beijing Tong go up and down completely randomly.
Pair Corralation between Walker Dunlop and Beijing Tong
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.16 times less return on investment than Beijing Tong. But when comparing it to its historical volatility, Walker Dunlop is 1.05 times less risky than Beijing Tong. It trades about 0.08 of its potential returns per unit of risk. Beijing Tong Ren is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 96.00 in Beijing Tong Ren on September 5, 2024 and sell it today you would earn a total of 5.00 from holding Beijing Tong Ren or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Beijing Tong Ren
Performance |
| Timeline |
| Walker Dunlop |
| Beijing Tong Ren |
Walker Dunlop and Beijing Tong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Beijing Tong
The main advantage of trading using opposite Walker Dunlop and Beijing Tong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Beijing Tong 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 Beijing Tong will offset losses from the drop in Beijing Tong's long position.| Walker Dunlop vs. Mr Cooper Group | Walker Dunlop vs. Security National Financial | Walker Dunlop vs. Encore Capital Group | Walker Dunlop vs. Timbercreek Financial Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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