Correlation Between Dlocal and Walker Dunlop

Can any of the company-specific risk be diversified away by investing in both Dlocal 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 Dlocal and Walker Dunlop into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dlocal and Walker Dunlop, you can compare the effects of market volatilities on Dlocal 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 Dlocal with a short position of Walker Dunlop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dlocal and Walker Dunlop.

Diversification Opportunities for Dlocal and Walker Dunlop

0.18

Correlation Coefficient

Dlocal  Walker Dunlop

Average diversification

The 3 months correlation between Dlocal and Walker is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dlocal and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop and Dlocal 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 Dlocal 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 Dlocal i.e., Dlocal and Walker Dunlop go up and down completely randomly.

Pair Corralation between Dlocal and Walker Dunlop

Considering the 90-day investment horizon Dlocal is expected to under-perform the Walker Dunlop. In addition to that, Dlocal is 2.47 times more volatile than Walker Dunlop. It trades about -0.05 of its total potential returns per unit of risk. Walker Dunlop is currently generating about -0.08 per unit of volatility. If you would invest  9,794  in Walker Dunlop on December 18, 2024 and sell it today you would lose (997.00) from holding Walker Dunlop or give up 10.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dlocal  vs.  Walker Dunlop

Dlocal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dlocal 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 essential indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Walker Dunlop

Risk-Adjusted Performance

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 latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Dlocal and Walker Dunlop

The main advantage of trading using opposite Dlocal and Walker Dunlop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dlocal 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.

The idea behind Dlocal and Walker Dunlop 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.