Correlation Between Walker Dunlop and Yum China
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Yum China 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 Yum China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Yum China Holdings, you can compare the effects of market volatilities on Walker Dunlop and Yum China 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 Yum China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Yum China.
Diversification Opportunities for Walker Dunlop and Yum China
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and Yum is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Yum China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yum China Holdings 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 Yum China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yum China Holdings has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Yum China go up and down completely randomly.
Pair Corralation between Walker Dunlop and Yum China
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.98 times more return on investment than Yum China. However, Walker Dunlop is 1.02 times less risky than Yum China. It trades about 0.04 of its potential returns per unit of risk. Yum China Holdings is currently generating about 0.0 per unit of risk. If you would invest 8,063 in Walker Dunlop on August 24, 2024 and sell it today you would earn a total of 2,786 from holding Walker Dunlop or generate 34.55% 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. Yum China Holdings
Performance |
| Timeline |
| Walker Dunlop |
| Yum China Holdings |
Walker Dunlop and Yum China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Yum China
The main advantage of trading using opposite Walker Dunlop and Yum China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Yum China 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 Yum China will offset losses from the drop in Yum China's long position.| Walker Dunlop vs. Encore Capital Group | Walker Dunlop vs. Federal Home Loan | Walker Dunlop vs. CNFinance Holdings | Walker Dunlop vs. Greystone Housing Impact |
| Yum China vs. Chipotle Mexican Grill | Yum China vs. Eshallgo Class A | Yum China vs. Amtech Systems | Yum China vs. Gold Fields Ltd |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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