Correlation Between Walker Dunlop and Streamwide

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

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

Diversification Opportunities for Walker Dunlop and Streamwide

-0.54

Correlation Coefficient

Walker Dunlop  Streamwide

Excellent diversification

The 3 months correlation between Walker and Streamwide is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Streamwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Streamwide 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 Streamwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Streamwide has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Streamwide go up and down completely randomly.

Pair Corralation between Walker Dunlop and Streamwide

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Streamwide. In addition to that, Walker Dunlop is 1.33 times more volatile than Streamwide. It trades about -0.19 of its total potential returns per unit of risk. Streamwide is currently generating about 0.07 per unit of volatility. If you would invest  3,040  in Streamwide on December 2, 2024 and sell it today you would earn a total of  200.00  from holding Streamwide or generate 6.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Walker Dunlop  vs.  Streamwide

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

Streamwide

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Streamwide are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Streamwide may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Walker Dunlop and Streamwide

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

The idea behind Walker Dunlop and Streamwide 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.