Correlation Between Walker Dunlop and JAPAN POST

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

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

Diversification Opportunities for Walker Dunlop and JAPAN POST

-0.45

Correlation Coefficient

Walker Dunlop  JAPAN POST

Very good diversification

The 3 months correlation between Walker and JAPAN is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and JAPAN POST BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN POST BANK 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 JAPAN POST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN POST BANK has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and JAPAN POST go up and down completely randomly.

Pair Corralation between Walker Dunlop and JAPAN POST

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the JAPAN POST. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 1.49 times less risky than JAPAN POST. The stock trades about 0.0 of its potential returns per unit of risk. The JAPAN POST BANK is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  915.00  in JAPAN POST BANK on August 31, 2024 and sell it today you would earn a total of  66.00  from holding JAPAN POST BANK or generate 7.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Walker Dunlop  vs.  JAPAN POST BANK

Walker Dunlop

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Walker Dunlop may actually be approaching a critical reversion point that can send shares even higher in December 2024.

JAPAN POST BANK

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JAPAN POST BANK are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, JAPAN POST is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Walker Dunlop and JAPAN POST

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

The idea behind Walker Dunlop and JAPAN POST BANK 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.