Correlation Between Walker Dunlop and BC Bud
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and BC Bud 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 BC Bud into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and The BC Bud, you can compare the effects of market volatilities on Walker Dunlop and BC Bud 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 BC Bud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and BC Bud.
Diversification Opportunities for Walker Dunlop and BC Bud
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walker and BCBCF is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and The BC Bud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC Bud 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 BC Bud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BC Bud has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and BC Bud go up and down completely randomly.
Pair Corralation between Walker Dunlop and BC Bud
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 18.07 times less return on investment than BC Bud. But when comparing it to its historical volatility, Walker Dunlop is 10.47 times less risky than BC Bud. It trades about 0.03 of its potential returns per unit of risk. The BC Bud is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8.34 in The BC Bud on December 1, 2024 and sell it today you would lose (3.84) from holding The BC Bud or give up 46.04% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.6% |
Values | Daily Returns |
Walker Dunlop vs. The BC Bud
Performance |
Timeline |
Walker Dunlop |
BC Bud |
Walker Dunlop and BC Bud Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walker Dunlop and BC Bud
The main advantage of trading using opposite Walker Dunlop and BC Bud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, BC Bud 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 BC Bud will offset losses from the drop in BC Bud'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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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