Correlation Between Greystone Housing and Walker Dunlop

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

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

Diversification Opportunities for Greystone Housing and Walker Dunlop

-0.63

Correlation Coefficient

Greystone Housing  Walker Dunlop

Excellent diversification

The 3 months correlation between Greystone and Walker is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Greystone Housing Impact and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop and Greystone Housing 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 Greystone Housing Impact 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 Greystone Housing i.e., Greystone Housing and Walker Dunlop go up and down completely randomly.

Pair Corralation between Greystone Housing and Walker Dunlop

Considering the 90-day investment horizon Greystone Housing Impact is expected to generate 1.03 times more return on investment than Walker Dunlop. However, Greystone Housing is 1.03 times more volatile than Walker Dunlop. It trades about 0.18 of its potential returns per unit of risk. Walker Dunlop is currently generating about -0.08 per unit of risk. If you would invest  1,037  in Greystone Housing Impact on December 29, 2024 and sell it today you would earn a total of  239.00  from holding Greystone Housing Impact or generate 23.05% return on investment over 90 days.

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

Greystone Housing Impact  vs.  Walker Dunlop

Greystone Housing Impact

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Greystone Housing Impact are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical indicators, Greystone Housing demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 Greystone Housing and Walker Dunlop

The main advantage of trading using opposite Greystone Housing and Walker Dunlop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greystone Housing 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 Greystone Housing Impact 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.