Correlation Between Walker Dunlop and Jyske Bank

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Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Jyske Bank 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 Jyske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Jyske Bank AS, you can compare the effects of market volatilities on Walker Dunlop and Jyske Bank 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 Jyske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Jyske Bank.

Diversification Opportunities for Walker Dunlop and Jyske Bank

-0.66
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Walker and Jyske is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Jyske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jyske Bank AS 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 Jyske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jyske Bank AS has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Jyske Bank go up and down completely randomly.

Pair Corralation between Walker Dunlop and Jyske Bank

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.06 times more return on investment than Jyske Bank. However, Walker Dunlop is 2.06 times more volatile than Jyske Bank AS. It trades about 0.17 of its potential returns per unit of risk. Jyske Bank AS is currently generating about 0.3 per unit of risk. If you would invest  9,434  in Walker Dunlop on December 30, 2023 and sell it today you would earn a total of  672.00  from holding Walker Dunlop or generate 7.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Walker Dunlop  vs.  Jyske Bank AS

 Performance 
       Timeline  
Walker Dunlop 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Walker Dunlop has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Walker Dunlop is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Jyske Bank AS 

Risk-Adjusted Performance

16 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Bank AS are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Jyske Bank displayed solid returns over the last few months and may actually be approaching a breakup point.

Walker Dunlop and Jyske Bank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walker Dunlop and Jyske Bank

The main advantage of trading using opposite Walker Dunlop and Jyske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Jyske Bank 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 Jyske Bank will offset losses from the drop in Jyske Bank's long position.
The idea behind Walker Dunlop and Jyske Bank AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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