Correlation Between Walker Dunlop and CI Lawrence

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

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

Diversification Opportunities for Walker Dunlop and CI Lawrence

0.13

Correlation Coefficient

Walker Dunlop  CI Lawrence

Average diversification

The 3 months correlation between Walker and CRED is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and CI Lawrence Park in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Lawrence Park 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 CI Lawrence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Lawrence Park has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and CI Lawrence go up and down completely randomly.

Pair Corralation between Walker Dunlop and CI Lawrence

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the CI Lawrence. In addition to that, Walker Dunlop is 12.86 times more volatile than CI Lawrence Park. It trades about -0.08 of its total potential returns per unit of risk. CI Lawrence Park is currently generating about -0.03 per unit of volatility. If you would invest  2,021  in CI Lawrence Park on December 28, 2024 and sell it today you would lose (6.00) from holding CI Lawrence Park or give up 0.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Walker Dunlop  vs.  CI Lawrence Park

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.

CI Lawrence Park

Risk-Adjusted Performance

Very Weak

Over the last 90 days CI Lawrence Park has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, CI Lawrence is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Walker Dunlop and CI Lawrence

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

The idea behind Walker Dunlop and CI Lawrence Park 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.