Correlation Between Walker Dunlop and Nighthawk Gold

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

Diversification Opportunities for Walker Dunlop and Nighthawk Gold

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Walker and Nighthawk is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Nighthawk Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nighthawk Gold Corp 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 Nighthawk Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nighthawk Gold Corp has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Nighthawk Gold go up and down completely randomly.

Pair Corralation between Walker Dunlop and Nighthawk Gold

If you would invest  10,357  in Walker Dunlop on September 6, 2024 and sell it today you would earn a total of  549.00  from holding Walker Dunlop or generate 5.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy1.59%
ValuesDaily Returns

Walker Dunlop  vs.  Nighthawk Gold Corp

 Performance 
       Timeline  
Walker Dunlop 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
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 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.
Nighthawk Gold Corp 

Risk-Adjusted Performance

0 of 100

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

Walker Dunlop and Nighthawk Gold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walker Dunlop and Nighthawk Gold

The main advantage of trading using opposite Walker Dunlop and Nighthawk Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Nighthawk Gold 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 Nighthawk Gold will offset losses from the drop in Nighthawk Gold's long position.
The idea behind Walker Dunlop and Nighthawk Gold Corp 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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