Correlation Between Walker Dunlop and American Shipping

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Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and American Shipping 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 American Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and American Shipping, you can compare the effects of market volatilities on Walker Dunlop and American Shipping 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 American Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and American Shipping.

Diversification Opportunities for Walker Dunlop and American Shipping

-0.06
  Correlation Coefficient

Good diversification

The 3 months correlation between Walker and American is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and American Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shipping 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 American Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shipping has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and American Shipping go up and down completely randomly.

Pair Corralation between Walker Dunlop and American Shipping

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.78 times more return on investment than American Shipping. However, Walker Dunlop is 1.29 times less risky than American Shipping. It trades about 0.04 of its potential returns per unit of risk. American Shipping is currently generating about -0.11 per unit of risk. If you would invest  10,603  in Walker Dunlop on September 5, 2024 and sell it today you would earn a total of  313.00  from holding Walker Dunlop or generate 2.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.44%
ValuesDaily Returns

Walker Dunlop  vs.  American Shipping

 Performance 
       Timeline  
Walker Dunlop 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 2 (%) 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.
American Shipping 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days American Shipping 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 forward-looking indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Walker Dunlop and American Shipping Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walker Dunlop and American Shipping

The main advantage of trading using opposite Walker Dunlop and American Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, American Shipping 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 American Shipping will offset losses from the drop in American Shipping's long position.
The idea behind Walker Dunlop and American Shipping 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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