Correlation Between Walker Dunlop and Ciena Corp
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Ciena Corp 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 Ciena Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Ciena Corp, you can compare the effects of market volatilities on Walker Dunlop and Ciena Corp 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 Ciena Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Ciena Corp.
Diversification Opportunities for Walker Dunlop and Ciena Corp
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Walker and Ciena is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Ciena Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ciena Corp 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 Ciena Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ciena Corp has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Ciena Corp go up and down completely randomly.
Pair Corralation between Walker Dunlop and Ciena Corp
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.7 times more return on investment than Ciena Corp. However, Walker Dunlop is 1.44 times less risky than Ciena Corp. It trades about 0.09 of its potential returns per unit of risk. Ciena Corp is currently generating about -0.05 per unit of risk. If you would invest 9,312 in Walker Dunlop on February 19, 2024 and sell it today you would earn a total of 928.00 from holding Walker Dunlop or generate 9.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Walker Dunlop vs. Ciena Corp
Performance |
Timeline |
Walker Dunlop |
Ciena Corp |
Walker Dunlop and Ciena Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walker Dunlop and Ciena Corp
The main advantage of trading using opposite Walker Dunlop and Ciena Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Ciena Corp 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 Ciena Corp will offset losses from the drop in Ciena Corp's long position.Walker Dunlop vs. Mr Cooper Group | Walker Dunlop vs. Ocwen Financial | Walker Dunlop vs. Velocity FinancialLlc | Walker Dunlop vs. Security National Financial |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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