Correlation Between Walker Dunlop and Siit Large

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

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

Diversification Opportunities for Walker Dunlop and Siit Large

0.36

Correlation Coefficient

Walker Dunlop  Siit Large

Weak diversification

The 3 months correlation between Walker and Siit is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Siit Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Large Cap 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 Siit Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Large Cap has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Siit Large go up and down completely randomly.

Pair Corralation between Walker Dunlop and Siit Large

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.86 times less return on investment than Siit Large. In addition to that, Walker Dunlop is 2.39 times more volatile than Siit Large Cap. It trades about 0.06 of its total potential returns per unit of risk. Siit Large Cap is currently generating about 0.28 per unit of volatility. If you would invest  20,589  in Siit Large Cap on September 8, 2024 and sell it today you would earn a total of  2,599  from holding Siit Large Cap or generate 12.62% return on investment over 90 days.

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

Walker Dunlop  vs.  Siit Large Cap

Walker Dunlop

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 4 (%) 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 January 2025.

Siit Large Cap

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Large Cap are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Siit Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Walker Dunlop and Siit Large

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

The idea behind Walker Dunlop and Siit Large Cap 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.