Correlation Between Walker Dunlop and Genting Bhd

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

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

Diversification Opportunities for Walker Dunlop and Genting Bhd

0.26

Correlation Coefficient

Walker Dunlop  Genting Bhd

Modest diversification

The 3 months correlation between Walker and Genting is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Genting Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genting Bhd 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 Genting Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genting Bhd has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Genting Bhd go up and down completely randomly.

Pair Corralation between Walker Dunlop and Genting Bhd

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Genting Bhd. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 1.17 times less risky than Genting Bhd. The stock trades about -0.09 of its potential returns per unit of risk. The Genting Bhd is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  359.00  in Genting Bhd on December 22, 2024 and sell it today you would lose (27.00) from holding Genting Bhd or give up 7.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Walker Dunlop  vs.  Genting Bhd

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.

Genting Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genting Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Walker Dunlop and Genting Bhd

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

The idea behind Walker Dunlop and Genting Bhd 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.