Correlation Between Walker Dunlop and Metalla Royalty

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

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

Diversification Opportunities for Walker Dunlop and Metalla Royalty

0.62

Correlation Coefficient

Walker Dunlop  Metalla Royalty

Poor diversification

The 3 months correlation between Walker and Metalla is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Metalla Royalty Streaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalla Royalty Streaming 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 Metalla Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalla Royalty Streaming has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Metalla Royalty go up and down completely randomly.

Pair Corralation between Walker Dunlop and Metalla Royalty

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.01 times less return on investment than Metalla Royalty. But when comparing it to its historical volatility, Walker Dunlop is 2.25 times less risky than Metalla Royalty. It trades about 0.05 of its potential returns per unit of risk. Metalla Royalty Streaming is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  299.00  in Metalla Royalty Streaming on August 30, 2024 and sell it today you would earn a total of  2.00  from holding Metalla Royalty Streaming or generate 0.67% return on investment over 90 days.

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

Walker Dunlop  vs.  Metalla Royalty Streaming

Walker Dunlop

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 3 (%) 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.

Metalla Royalty Streaming

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Metalla Royalty Streaming are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Metalla Royalty is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walker Dunlop and Metalla Royalty

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

The idea behind Walker Dunlop and Metalla Royalty Streaming 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.