Correlation Between Walker Dunlop and Industrivarden

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

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

Diversification Opportunities for Walker Dunlop and Industrivarden

0.56

Correlation Coefficient

Walker Dunlop  Industrivarden

Very weak diversification

The 3 months correlation between Walker and Industrivarden is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Industrivarden AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrivarden AB ser 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 Industrivarden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrivarden AB ser has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Industrivarden go up and down completely randomly.

Pair Corralation between Walker Dunlop and Industrivarden

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.19 times less return on investment than Industrivarden. In addition to that, Walker Dunlop is 1.72 times more volatile than Industrivarden AB ser. It trades about 0.04 of its total potential returns per unit of risk. Industrivarden AB ser is currently generating about 0.07 per unit of volatility. If you would invest  35,380  in Industrivarden AB ser on September 12, 2024 and sell it today you would earn a total of  1,460  from holding Industrivarden AB ser or generate 4.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Walker Dunlop  vs.  Industrivarden AB ser

Walker Dunlop

Risk-Adjusted Performance

2 of 100

Insignificant

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.

Industrivarden AB ser

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Industrivarden AB ser are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Industrivarden is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walker Dunlop and Industrivarden

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

The idea behind Walker Dunlop and Industrivarden AB ser 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.