Correlation Between Walker Dunlop and KROGER

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

By analyzing existing cross correlation between Walker Dunlop and KROGER 54 percent, you can compare the effects of market volatilities on Walker Dunlop and KROGER 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 KROGER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and KROGER.

Diversification Opportunities for Walker Dunlop and KROGER

-0.01

Correlation Coefficient

Walker Dunlop  KROGER

Good diversification

The 3 months correlation between Walker and KROGER is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and KROGER 54 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KROGER 54 percent 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 KROGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KROGER 54 percent has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and KROGER go up and down completely randomly.

Pair Corralation between Walker Dunlop and KROGER

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the KROGER. In addition to that, Walker Dunlop is 1.84 times more volatile than KROGER 54 percent. It trades about -0.19 of its total potential returns per unit of risk. KROGER 54 percent is currently generating about -0.07 per unit of volatility. If you would invest  10,049  in KROGER 54 percent on December 2, 2024 and sell it today you would lose (335.00) from holding KROGER 54 percent or give up 3.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	70.49%
Values	Daily Returns

Walker Dunlop  vs.  KROGER 54 percent

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.

KROGER 54 percent

Risk-Adjusted Performance

Very Weak

Over the last 90 days KROGER 54 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KROGER 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 KROGER

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

The idea behind Walker Dunlop and KROGER 54 percent 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.