Correlation Between Walker Dunlop and CIBC Qx

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

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

Diversification Opportunities for Walker Dunlop and CIBC Qx

0.05

Correlation Coefficient

Walker Dunlop  CIBC Qx

Significant diversification

The 3 months correlation between Walker and CIBC is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and CIBC Qx Low in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Qx Low 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 CIBC Qx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Qx Low has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and CIBC Qx go up and down completely randomly.

Pair Corralation between Walker Dunlop and CIBC Qx

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the CIBC Qx. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 1.27 times less risky than CIBC Qx. The stock trades about -0.09 of its potential returns per unit of risk. The CIBC Qx Low is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  2,348  in CIBC Qx Low on December 28, 2024 and sell it today you would lose (274.00) from holding CIBC Qx Low or give up 11.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Walker Dunlop  vs.  CIBC Qx Low

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.

CIBC Qx Low

Risk-Adjusted Performance

Very Weak

Over the last 90 days CIBC Qx Low has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with Walker Dunlop and CIBC Qx

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

The idea behind Walker Dunlop and CIBC Qx Low 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.