Correlation Between Walker Dunlop and PHENIXFIN

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

Diversification Opportunities for Walker Dunlop and PHENIXFIN

-0.86
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Walker and PHENIXFIN is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and PHENIXFIN P DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHENIXFIN P DL 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 PHENIXFIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHENIXFIN P DL has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and PHENIXFIN go up and down completely randomly.

Pair Corralation between Walker Dunlop and PHENIXFIN

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the PHENIXFIN. In addition to that, Walker Dunlop is 1.36 times more volatile than PHENIXFIN P DL. It trades about -0.1 of its total potential returns per unit of risk. PHENIXFIN P DL is currently generating about 0.07 per unit of volatility. If you would invest  4,420  in PHENIXFIN P DL on October 23, 2024 and sell it today you would earn a total of  240.00  from holding PHENIXFIN P DL or generate 5.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy98.33%
ValuesDaily Returns

Walker Dunlop  vs.  PHENIXFIN P DL

 Performance 
       Timeline  
Walker Dunlop 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
PHENIXFIN P DL 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in PHENIXFIN P DL are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PHENIXFIN may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Walker Dunlop and PHENIXFIN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walker Dunlop and PHENIXFIN

The main advantage of trading using opposite Walker Dunlop and PHENIXFIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, PHENIXFIN 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 PHENIXFIN will offset losses from the drop in PHENIXFIN's long position.
The idea behind Walker Dunlop and PHENIXFIN P DL 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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