Correlation Between Walker Dunlop and Xiwang Special

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

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

Diversification Opportunities for Walker Dunlop and Xiwang Special

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Correlation Coefficient

Walker Dunlop  Xiwang Special

Pay attention - limited upside

The 3 months correlation between Walker and Xiwang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Xiwang Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiwang Special Steel 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 Xiwang Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiwang Special Steel has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Xiwang Special go up and down completely randomly.

Pair Corralation between Walker Dunlop and Xiwang Special

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 219.96 times less return on investment than Xiwang Special. But when comparing it to its historical volatility, Walker Dunlop is 45.28 times less risky than Xiwang Special. It trades about 0.02 of its potential returns per unit of risk. Xiwang Special Steel is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1.65  in Xiwang Special Steel on October 23, 2024 and sell it today you would lose (1.64) from holding Xiwang Special Steel or give up 99.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.0%
Values	Daily Returns

Walker Dunlop  vs.  Xiwang Special Steel

Walker Dunlop

Risk-Adjusted Performance

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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 weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Xiwang Special Steel

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Xiwang Special Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Xiwang Special is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Walker Dunlop and Xiwang Special

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

The idea behind Walker Dunlop and Xiwang Special Steel 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.

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 the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.