Correlation Between Walker Dunlop and Entourage Health

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

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

Diversification Opportunities for Walker Dunlop and Entourage Health

0.0

Correlation Coefficient

Walker Dunlop  Entourage Health

Pay attention - limited upside

The 3 months correlation between Walker and Entourage is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Entourage Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entourage Health Corp 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 Entourage Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entourage Health Corp has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Entourage Health go up and down completely randomly.

Pair Corralation between Walker Dunlop and Entourage Health

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 27.42 times less return on investment than Entourage Health. But when comparing it to its historical volatility, Walker Dunlop is 12.31 times less risky than Entourage Health. It trades about 0.03 of its potential returns per unit of risk. Entourage Health Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.87  in Entourage Health Corp on September 12, 2024 and sell it today you would lose (0.09) from holding Entourage Health Corp or give up 10.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Walker Dunlop  vs.  Entourage Health Corp

Walker Dunlop

Risk-Adjusted Performance

2 of 100

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.

Entourage Health Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Entourage Health Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Entourage Health reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walker Dunlop and Entourage Health

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

The idea behind Walker Dunlop and Entourage Health Corp 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.