Correlation Between Walker Dunlop and Impala Platinum

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Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Impala Platinum 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 Impala Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Impala Platinum Holdings, you can compare the effects of market volatilities on Walker Dunlop and Impala Platinum 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 Impala Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Impala Platinum.

Diversification Opportunities for Walker Dunlop and Impala Platinum

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Walker and Impala is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Impala Platinum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impala Platinum Holdings 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 Impala Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impala Platinum Holdings has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Impala Platinum go up and down completely randomly.

Pair Corralation between Walker Dunlop and Impala Platinum

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Impala Platinum. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 1.16 times less risky than Impala Platinum. The stock trades about -0.04 of its potential returns per unit of risk. The Impala Platinum Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  469.00  in Impala Platinum Holdings on October 23, 2024 and sell it today you would earn a total of  43.00  from holding Impala Platinum Holdings or generate 9.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy88.89%
ValuesDaily Returns

Walker Dunlop  vs.  Impala Platinum Holdings

 Performance 
       Timeline  
Walker Dunlop 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Impala Platinum Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Impala Platinum Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Impala Platinum is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Walker Dunlop and Impala Platinum Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walker Dunlop and Impala Platinum

The main advantage of trading using opposite Walker Dunlop and Impala Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Impala Platinum 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 Impala Platinum will offset losses from the drop in Impala Platinum's long position.
The idea behind Walker Dunlop and Impala Platinum Holdings 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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