Correlation Between Walker Dunlop and Vietnam Dairy

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

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

Diversification Opportunities for Walker Dunlop and Vietnam Dairy

-0.29

Correlation Coefficient

Walker Dunlop  Vietnam Dairy

Very good diversification

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

Pair Corralation between Walker Dunlop and Vietnam Dairy

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.79 times more return on investment than Vietnam Dairy. However, Walker Dunlop is 1.79 times more volatile than Vietnam Dairy Products. It trades about 0.04 of its potential returns per unit of risk. Vietnam Dairy Products is currently generating about -0.22 per unit of risk. If you would invest  10,603  in Walker Dunlop on September 5, 2024 and sell it today you would earn a total of  313.00  from holding Walker Dunlop or generate 2.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Walker Dunlop  vs.  Vietnam Dairy Products

Walker Dunlop

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 2 (%) 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.

Vietnam Dairy Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vietnam Dairy Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Walker Dunlop and Vietnam Dairy

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

The idea behind Walker Dunlop and Vietnam Dairy Products 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.

Check out your portfolio center.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.