Correlation Between Walker Dunlop and Valneva SE

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

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

Diversification Opportunities for Walker Dunlop and Valneva SE

-0.29

Correlation Coefficient

Walker Dunlop  Valneva SE

Very good diversification

The 3 months correlation between Walker and Valneva is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Valneva SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE 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 Valneva SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valneva SE has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Valneva SE go up and down completely randomly.

Pair Corralation between Walker Dunlop and Valneva SE

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.55 times more return on investment than Valneva SE. However, Walker Dunlop is 1.82 times less risky than Valneva SE. It trades about 0.04 of its potential returns per unit of risk. Valneva SE is currently generating about -0.04 per unit of risk. If you would invest  7,669  in Walker Dunlop on September 4, 2024 and sell it today you would earn a total of  3,352  from holding Walker Dunlop or generate 43.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.21%
Values	Daily Returns

Walker Dunlop  vs.  Valneva SE

Walker Dunlop

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Walker Dunlop is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Valneva SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Valneva SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Walker Dunlop and Valneva SE

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

The idea behind Walker Dunlop and Valneva SE 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.