Correlation Between Walker Dunlop and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and BJs Restaurants 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 BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and BJs Restaurants, you can compare the effects of market volatilities on Walker Dunlop and BJs Restaurants 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 BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and BJs Restaurants.
Diversification Opportunities for Walker Dunlop and BJs Restaurants
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and BJs is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants 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 BJs Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Restaurants has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and BJs Restaurants go up and down completely randomly.
Pair Corralation between Walker Dunlop and BJs Restaurants
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the BJs Restaurants. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 2.08 times less risky than BJs Restaurants. The stock trades about -0.02 of its potential returns per unit of risk. The BJs Restaurants is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,440 in BJs Restaurants on August 31, 2024 and sell it today you would earn a total of 140.00 from holding BJs Restaurants or generate 4.07% 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. BJs Restaurants
Performance |
| Timeline |
| Walker Dunlop |
| BJs Restaurants |
Walker Dunlop and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and BJs Restaurants
The main advantage of trading using opposite Walker Dunlop and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, BJs Restaurants 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 BJs Restaurants will offset losses from the drop in BJs Restaurants' 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 |
| BJs Restaurants vs. Kaiser Aluminum | BJs Restaurants vs. Infrastrutture Wireless Italiane | BJs Restaurants vs. AAC TECHNOLOGHLDGADR | BJs Restaurants vs. SIMS METAL MGT |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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