Correlation Between Walker Dunlop and Federal Home
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Federal Home 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 Federal Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Federal Home Loan, you can compare the effects of market volatilities on Walker Dunlop and Federal Home 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 Federal Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Federal Home.
Diversification Opportunities for Walker Dunlop and Federal Home
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walker and Federal is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Federal Home Loan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Home Loan 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 Federal Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Home Loan has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Federal Home go up and down completely randomly.
Pair Corralation between Walker Dunlop and Federal Home
Assuming the 90 days horizon Walker Dunlop is expected to generate 11.81 times less return on investment than Federal Home. But when comparing it to its historical volatility, Walker Dunlop is 2.92 times less risky than Federal Home. It trades about 0.03 of its potential returns per unit of risk. Federal Home Loan is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Federal Home Loan on December 11, 2024 and sell it today you would earn a total of 417.00 from holding Federal Home Loan or generate 1191.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Walker Dunlop vs. Federal Home Loan
Performance |
Timeline |
Walker Dunlop |
Federal Home Loan |
Walker Dunlop and Federal Home Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walker Dunlop and Federal Home
The main advantage of trading using opposite Walker Dunlop and Federal Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Federal Home 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 Federal Home will offset losses from the drop in Federal Home's long position.Walker Dunlop vs. SIERRA METALS | Walker Dunlop vs. Cleanaway Waste Management | Walker Dunlop vs. Marie Brizard Wine | Walker Dunlop vs. Fortescue Metals Group |
Federal Home vs. Harmony Gold Mining | Federal Home vs. De Grey Mining | Federal Home vs. Universal Display | Federal Home vs. China Resources Beer |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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