Correlation Between Walker Dunlop and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Lundin Mining 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 Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Lundin Mining, you can compare the effects of market volatilities on Walker Dunlop and Lundin Mining 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 Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Lundin Mining.
Diversification Opportunities for Walker Dunlop and Lundin Mining
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walker and Lundin is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining 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 Lundin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mining has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Lundin Mining go up and down completely randomly.
Pair Corralation between Walker Dunlop and Lundin Mining
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Lundin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 1.18 times less risky than Lundin Mining. The stock trades about -0.19 of its potential returns per unit of risk. The Lundin Mining is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 10,670 in Lundin Mining on December 1, 2024 and sell it today you would lose (2,030) from holding Lundin Mining or give up 19.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.33% |
Values | Daily Returns |
Walker Dunlop vs. Lundin Mining
Performance |
Timeline |
Walker Dunlop |
Lundin Mining |
Walker Dunlop and Lundin Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walker Dunlop and Lundin Mining
The main advantage of trading using opposite Walker Dunlop and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Lundin Mining 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 Lundin Mining will offset losses from the drop in Lundin Mining'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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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