Correlation Between Walker Dunlop and Thai Union

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

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

Diversification Opportunities for Walker Dunlop and Thai Union

0.42

Correlation Coefficient

Walker Dunlop  Thai Union

Very weak diversification

The 3 months correlation between Walker and Thai is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Thai Union Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Union Group 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 Thai Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Union Group has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Thai Union go up and down completely randomly.

Pair Corralation between Walker Dunlop and Thai Union

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Thai Union. In addition to that, Walker Dunlop is 1.08 times more volatile than Thai Union Group. It trades about -0.08 of its total potential returns per unit of risk. Thai Union Group is currently generating about -0.09 per unit of volatility. If you would invest  1,261  in Thai Union Group on December 27, 2024 and sell it today you would lose (131.00) from holding Thai Union Group or give up 10.39% of portfolio value over 90 days.

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

Walker Dunlop  vs.  Thai Union Group

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.

Thai Union Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thai Union Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Walker Dunlop and Thai Union

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

The idea behind Walker Dunlop and Thai Union Group 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.