Correlation Between Walker Dunlop and Medincell

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

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

Diversification Opportunities for Walker Dunlop and Medincell

0.78

Correlation Coefficient

Walker Dunlop  Medincell

Poor diversification

The 3 months correlation between Walker and Medincell is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Medincell SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medincell SA 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 Medincell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medincell SA has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Medincell go up and down completely randomly.

Pair Corralation between Walker Dunlop and Medincell

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Medincell. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 1.32 times less risky than Medincell. The stock trades about -0.09 of its potential returns per unit of risk. The Medincell SA is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  1,680  in Medincell SA on December 30, 2024 and sell it today you would lose (184.00) from holding Medincell SA or give up 10.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.38%
Values	Daily Returns

Walker Dunlop  vs.  Medincell SA

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.

Medincell SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Medincell SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Walker Dunlop and Medincell

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

The idea behind Walker Dunlop and Medincell SA 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.