Correlation Between Walker Dunlop and Grupa KTY

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

Diversification Opportunities for Walker Dunlop and Grupa KTY

0.23
  Correlation Coefficient

Modest diversification

The 3 months correlation between Walker and Grupa is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Grupa KTY SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupa KTY SA 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 Grupa KTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupa KTY SA has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Grupa KTY go up and down completely randomly.

Pair Corralation between Walker Dunlop and Grupa KTY

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Grupa KTY. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 1.5 times less risky than Grupa KTY. The stock trades about -0.07 of its potential returns per unit of risk. The Grupa KTY SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  67,000  in Grupa KTY SA on September 6, 2024 and sell it today you would earn a total of  4,200  from holding Grupa KTY SA or generate 6.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Walker Dunlop  vs.  Grupa KTY SA

 Performance 
       Timeline  
Walker Dunlop 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 4 (%) 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.
Grupa KTY SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Grupa KTY SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Grupa KTY is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Walker Dunlop and Grupa KTY Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walker Dunlop and Grupa KTY

The main advantage of trading using opposite Walker Dunlop and Grupa KTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Grupa KTY 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 Grupa KTY will offset losses from the drop in Grupa KTY's long position.
The idea behind Walker Dunlop and Grupa KTY SA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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