Correlation Between Federal Home and Walker Dunlop
Can any of the company-specific risk be diversified away by investing in both Federal Home and Walker Dunlop 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 Federal Home and Walker Dunlop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Home Loan and Walker Dunlop, you can compare the effects of market volatilities on Federal Home and Walker Dunlop 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 Federal Home with a short position of Walker Dunlop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Home and Walker Dunlop.
Diversification Opportunities for Federal Home and Walker Dunlop
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federal and Walker is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Federal Home Loan and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop and Federal Home 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 Federal Home Loan are associated (or correlated) with Walker Dunlop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walker Dunlop has no effect on the direction of Federal Home i.e., Federal Home and Walker Dunlop go up and down completely randomly.
Pair Corralation between Federal Home and Walker Dunlop
Assuming the 90 days horizon Federal Home Loan is expected to generate 1.34 times more return on investment than Walker Dunlop. However, Federal Home is 1.34 times more volatile than Walker Dunlop. It trades about 0.03 of its potential returns per unit of risk. Walker Dunlop is currently generating about 0.01 per unit of risk. If you would invest 490.00 in Federal Home Loan on January 25, 2024 and sell it today you would earn a total of 150.00 from holding Federal Home Loan or generate 30.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Federal Home Loan vs. Walker Dunlop
Performance |
| Timeline |
| Federal Home Loan |
| Walker Dunlop |
Federal Home and Walker Dunlop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Home and Walker Dunlop
The main advantage of trading using opposite Federal Home and Walker Dunlop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Home position performs unexpectedly, Walker Dunlop 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 Walker Dunlop will offset losses from the drop in Walker Dunlop's long position.| Federal Home vs. Federal Home Loan | Federal Home vs. Federal National Mortgage | Federal Home vs. Federal Home Loan | Federal Home vs. Federal Home Loan |
| Walker Dunlop vs. Mr Cooper Group | Walker Dunlop vs. Ocwen Financial | Walker Dunlop vs. Velocity FinancialLlc | Walker Dunlop vs. Security National Financial |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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