Correlation Between Walker Dunlop and Phoenix Materials

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

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

Diversification Opportunities for Walker Dunlop and Phoenix Materials

-0.03

Correlation Coefficient

Walker Dunlop  Phoenix Materials

Good diversification

The 3 months correlation between Walker and Phoenix is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Phoenix Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Materials 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 Phoenix Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Materials has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Phoenix Materials go up and down completely randomly.

Pair Corralation between Walker Dunlop and Phoenix Materials

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.56 times more return on investment than Phoenix Materials. However, Walker Dunlop is 1.79 times less risky than Phoenix Materials. It trades about 0.04 of its potential returns per unit of risk. Phoenix Materials Co is currently generating about -0.13 per unit of risk. If you would invest  10,571  in Walker Dunlop on September 4, 2024 and sell it today you would earn a total of  345.00  from holding Walker Dunlop or generate 3.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.19%
Values	Daily Returns

Walker Dunlop  vs.  Phoenix Materials Co

Walker Dunlop

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Walker Dunlop is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Phoenix Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phoenix Materials Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Walker Dunlop and Phoenix Materials

The main advantage of trading using opposite Walker Dunlop and Phoenix Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Phoenix Materials 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 Phoenix Materials will offset losses from the drop in Phoenix Materials' long position.

The idea behind Walker Dunlop and Phoenix Materials Co 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.