Correlation Between Walker Dunlop and Birks

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Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Birks 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 Birks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Birks Group, you can compare the effects of market volatilities on Walker Dunlop and Birks 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 Birks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Birks.

Diversification Opportunities for Walker Dunlop and Birks

0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Walker and Birks is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Birks Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birks Group 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 Birks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birks Group has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Birks go up and down completely randomly.

Pair Corralation between Walker Dunlop and Birks

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.54 times more return on investment than Birks. However, Walker Dunlop is 1.87 times less risky than Birks. It trades about 0.01 of its potential returns per unit of risk. Birks Group is currently generating about -0.09 per unit of risk. If you would invest  9,469  in Walker Dunlop on November 9, 2024 and sell it today you would earn a total of  104.00  from holding Walker Dunlop or generate 1.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Walker Dunlop  vs.  Birks Group

 Performance 
       Timeline  
Walker Dunlop 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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 March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Birks Group 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Birks Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Walker Dunlop and Birks Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walker Dunlop and Birks

The main advantage of trading using opposite Walker Dunlop and Birks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Birks 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 Birks will offset losses from the drop in Birks' long position.
The idea behind Walker Dunlop and Birks Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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