Correlation Between Walker Dunlop and MULTI UNITS

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

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

Diversification Opportunities for Walker Dunlop and MULTI UNITS

0.44

Correlation Coefficient

Walker Dunlop  MULTI UNITS

Very weak diversification

The 3 months correlation between Walker and MULTI is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and MULTI UNITS LUXEMBOURG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MULTI UNITS LUXEMBOURG 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 MULTI UNITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MULTI UNITS LUXEMBOURG has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and MULTI UNITS go up and down completely randomly.

Pair Corralation between Walker Dunlop and MULTI UNITS

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the MULTI UNITS. In addition to that, Walker Dunlop is 1.48 times more volatile than MULTI UNITS LUXEMBOURG. It trades about -0.19 of its total potential returns per unit of risk. MULTI UNITS LUXEMBOURG is currently generating about -0.02 per unit of volatility. If you would invest  4,646  in MULTI UNITS LUXEMBOURG on December 2, 2024 and sell it today you would lose (111.00) from holding MULTI UNITS LUXEMBOURG or give up 2.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Walker Dunlop  vs.  MULTI UNITS LUXEMBOURG

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

MULTI UNITS LUXEMBOURG

Risk-Adjusted Performance

Very Weak

Over the last 90 days MULTI UNITS LUXEMBOURG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MULTI UNITS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walker Dunlop and MULTI UNITS

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

The idea behind Walker Dunlop and MULTI UNITS LUXEMBOURG 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.