Correlation Between Walker Dunlop and Willdan
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Willdan 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 Willdan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Willdan Group, you can compare the effects of market volatilities on Walker Dunlop and Willdan 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 Willdan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Willdan.
Diversification Opportunities for Walker Dunlop and Willdan
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and Willdan is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Willdan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willdan Group 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 Willdan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willdan Group has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Willdan go up and down completely randomly.
Pair Corralation between Walker Dunlop and Willdan
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.61 times less return on investment than Willdan. But when comparing it to its historical volatility, Walker Dunlop is 1.53 times less risky than Willdan. It trades about 0.07 of its potential returns per unit of risk. Willdan Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,940 in Willdan Group on August 24, 2024 and sell it today you would earn a total of 2,308 from holding Willdan Group or generate 118.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Walker Dunlop vs. Willdan Group
Performance |
| Timeline |
| Walker Dunlop |
| Willdan Group |
Walker Dunlop and Willdan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Willdan
The main advantage of trading using opposite Walker Dunlop and Willdan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Willdan 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 Willdan will offset losses from the drop in Willdan's long position.| Walker Dunlop vs. Encore Capital Group | Walker Dunlop vs. Federal Home Loan | Walker Dunlop vs. Federal National Mortgage | Walker Dunlop vs. CNFinance Holdings |
| Willdan vs. WSP Global | Willdan vs. Comfort Systems USA | Willdan vs. MYR Group | Willdan vs. Matrix Service Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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