Correlation Between Walker Dunlop and Graham

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

Diversification Opportunities for Walker Dunlop and Graham

-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between Walker and Graham is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Graham in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham 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 Graham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Graham go up and down completely randomly.

Pair Corralation between Walker Dunlop and Graham

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Graham. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 2.32 times less risky than Graham. The stock trades about -0.06 of its potential returns per unit of risk. The Graham is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  2,948  in Graham on August 26, 2024 and sell it today you would earn a total of  1,517  from holding Graham or generate 51.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Walker Dunlop  vs.  Graham

 Performance 
       Timeline  
Walker Dunlop 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 1 (%) 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.
Graham 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Graham are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical indicators, Graham displayed solid returns over the last few months and may actually be approaching a breakup point.

Walker Dunlop and Graham Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walker Dunlop and Graham

The main advantage of trading using opposite Walker Dunlop and Graham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Graham 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 Graham will offset losses from the drop in Graham's long position.
The idea behind Walker Dunlop and Graham 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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