Correlation Between Walker Dunlop and Airbus Group
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Airbus Group 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 Airbus Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Airbus Group SE, you can compare the effects of market volatilities on Walker Dunlop and Airbus Group 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 Airbus Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Airbus Group.
Diversification Opportunities for Walker Dunlop and Airbus Group
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walker and Airbus is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Airbus Group SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus Group SE 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 Airbus Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus Group SE has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Airbus Group go up and down completely randomly.
Pair Corralation between Walker Dunlop and Airbus Group
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Airbus Group. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 1.22 times less risky than Airbus Group. The stock trades about -0.03 of its potential returns per unit of risk. The Airbus Group SE is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 14,182 in Airbus Group SE on September 6, 2024 and sell it today you would earn a total of 1,240 from holding Airbus Group SE or generate 8.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Walker Dunlop vs. Airbus Group SE
Performance |
Timeline |
Walker Dunlop |
Airbus Group SE |
Walker Dunlop and Airbus Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walker Dunlop and Airbus Group
The main advantage of trading using opposite Walker Dunlop and Airbus Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Airbus Group 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 Airbus Group will offset losses from the drop in Airbus Group's 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 |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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