Correlation Between Walker Dunlop and Bolt Biotherapeutics

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

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

Diversification Opportunities for Walker Dunlop and Bolt Biotherapeutics

0.55

Correlation Coefficient

Walker Dunlop  Bolt Biotherapeutics

Very weak diversification

The 3 months correlation between Walker and Bolt is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Bolt Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolt Biotherapeutics 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 Bolt Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolt Biotherapeutics has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Bolt Biotherapeutics go up and down completely randomly.

Pair Corralation between Walker Dunlop and Bolt Biotherapeutics

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.54 times more return on investment than Bolt Biotherapeutics. However, Walker Dunlop is 1.86 times less risky than Bolt Biotherapeutics. It trades about -0.09 of its potential returns per unit of risk. Bolt Biotherapeutics is currently generating about -0.06 per unit of risk. If you would invest  9,600  in Walker Dunlop on December 27, 2024 and sell it today you would lose (1,060) from holding Walker Dunlop or give up 11.04% of portfolio value over 90 days.

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

Walker Dunlop  vs.  Bolt Biotherapeutics

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.

Bolt Biotherapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bolt Biotherapeutics 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 essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Walker Dunlop and Bolt Biotherapeutics

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

The idea behind Walker Dunlop and Bolt Biotherapeutics 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.