Correlation Between Walker Dunlop and Oakmark International

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

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

Diversification Opportunities for Walker Dunlop and Oakmark International

-0.71

Correlation Coefficient

Walker Dunlop  Oakmark International

Pay attention - limited upside

The 3 months correlation between Walker and Oakmark is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Oakmark International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International 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 Oakmark International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark International has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Oakmark International go up and down completely randomly.

Pair Corralation between Walker Dunlop and Oakmark International

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Oakmark International. In addition to that, Walker Dunlop is 1.87 times more volatile than Oakmark International Small. It trades about -0.08 of its total potential returns per unit of risk. Oakmark International Small is currently generating about 0.17 per unit of volatility. If you would invest  1,776  in Oakmark International Small on December 28, 2024 and sell it today you would earn a total of  199.00  from holding Oakmark International Small or generate 11.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Walker Dunlop  vs.  Oakmark International Small

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.

Oakmark International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oakmark International Small are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Oakmark International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Walker Dunlop and Oakmark International

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

The idea behind Walker Dunlop and Oakmark International Small 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.