Correlation Between Walker Dunlop and GIBB River

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

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

Diversification Opportunities for Walker Dunlop and GIBB River

0.28

Correlation Coefficient

Walker Dunlop  GIBB River

Modest diversification

The 3 months correlation between Walker and GIBB is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and GIBB River Diamonds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GIBB River Diamonds 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 GIBB River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GIBB River Diamonds has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and GIBB River go up and down completely randomly.

Pair Corralation between Walker Dunlop and GIBB River

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the GIBB River. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 2.38 times less risky than GIBB River. The stock trades about -0.1 of its potential returns per unit of risk. The GIBB River Diamonds is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4.00  in GIBB River Diamonds on December 20, 2024 and sell it today you would earn a total of  0.20  from holding GIBB River Diamonds or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Walker Dunlop  vs.  GIBB River Diamonds

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.

GIBB River Diamonds

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GIBB River Diamonds are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, GIBB River may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Walker Dunlop and GIBB River

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

The idea behind Walker Dunlop and GIBB River Diamonds 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.