Correlation Between Walker Dunlop and 26443CAA1

Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and 26443CAA1 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 26443CAA1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Walker Dunlop and DUKE UNIV HEALTH, you can compare the effects of market volatilities on Walker Dunlop and 26443CAA1 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 26443CAA1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and 26443CAA1.

Diversification Opportunities for Walker Dunlop and 26443CAA1

0.4

Correlation Coefficient

Walker Dunlop  26443CAA1

Very weak diversification

The 3 months correlation between Walker and 26443CAA1 is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and DUKE UNIV HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE UNIV HEALTH 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 26443CAA1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE UNIV HEALTH has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and 26443CAA1 go up and down completely randomly.

Pair Corralation between Walker Dunlop and 26443CAA1

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the 26443CAA1. In addition to that, Walker Dunlop is 1.3 times more volatile than DUKE UNIV HEALTH. It trades about -0.14 of its total potential returns per unit of risk. DUKE UNIV HEALTH is currently generating about -0.06 per unit of volatility. If you would invest  8,377  in DUKE UNIV HEALTH on October 8, 2024 and sell it today you would lose (229.00) from holding DUKE UNIV HEALTH or give up 2.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	48.39%
Values	Daily Returns

Walker Dunlop  vs.  DUKE UNIV HEALTH

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 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.

DUKE UNIV HEALTH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUKE UNIV HEALTH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26443CAA1 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walker Dunlop and 26443CAA1

The main advantage of trading using opposite Walker Dunlop and 26443CAA1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, 26443CAA1 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 26443CAA1 will offset losses from the drop in 26443CAA1's long position.

The idea behind Walker Dunlop and DUKE UNIV HEALTH 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.