Correlation Between Walker Dunlop and OBIC CoLtd

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

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

Diversification Opportunities for Walker Dunlop and OBIC CoLtd

0.34

Correlation Coefficient

Walker Dunlop  OBIC CoLtd

Weak diversification

The 3 months correlation between Walker and OBIC is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and OBIC CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OBIC CoLtd 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 OBIC CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OBIC CoLtd has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and OBIC CoLtd go up and down completely randomly.

Pair Corralation between Walker Dunlop and OBIC CoLtd

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.26 times less return on investment than OBIC CoLtd. In addition to that, Walker Dunlop is 1.17 times more volatile than OBIC CoLtd. It trades about 0.02 of its total potential returns per unit of risk. OBIC CoLtd is currently generating about 0.02 per unit of volatility. If you would invest  2,720  in OBIC CoLtd on October 7, 2024 and sell it today you would earn a total of  160.00  from holding OBIC CoLtd or generate 5.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.56%
Values	Daily Returns

Walker Dunlop  vs.  OBIC CoLtd

Walker Dunlop

Risk-Adjusted Performance

0 of 100

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.

OBIC CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Walker Dunlop and OBIC CoLtd

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

The idea behind Walker Dunlop and OBIC CoLtd 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.