Correlation Between Walker Dunlop and Bancor Network

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

Diversification Opportunities for Walker Dunlop and Bancor Network

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Walker and Bancor is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Bancor Network Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancor Network Token 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 Bancor Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancor Network Token has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Bancor Network go up and down completely randomly.

Pair Corralation between Walker Dunlop and Bancor Network

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.47 times more return on investment than Bancor Network. However, Walker Dunlop is 2.12 times less risky than Bancor Network. It trades about -0.03 of its potential returns per unit of risk. Bancor Network Token is currently generating about -0.16 per unit of risk. If you would invest  11,013  in Walker Dunlop on July 3, 2022 and sell it today you would lose (2,640)  from holding Walker Dunlop or give up 23.97% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy91.51%
ValuesDaily Returns

Walker Dunlop  vs.  Bancor Network Token

 Performance (%) 
       Timeline  
Walker Dunlop 
Walker Performance
0 of 100
Over the last 90 days Walker Dunlop has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in November 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Walker Price Channel

Bancor Network Token 
Bancor Performance
0 of 100
Over the last 90 days Bancor Network Token has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bancor Network is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bancor Price Channel

Walker Dunlop and Bancor Network Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walker Dunlop and Bancor Network

The main advantage of trading using opposite Walker Dunlop and Bancor Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Bancor Network 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 Bancor Network will offset losses from the drop in Bancor Network's long position.
Walker Dunlop vs. McDonalds Corp
The idea behind Walker Dunlop and Bancor Network Token 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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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 Transaction History module to view history of all your transactions and understand their impact on performance.

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