Correlation Between Walker Dunlop and Nordic Halibut

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

Diversification Opportunities for Walker Dunlop and Nordic Halibut

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between Walker and Nordic is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Nordic Halibut AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Halibut AS 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 Nordic Halibut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Halibut AS has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Nordic Halibut go up and down completely randomly.

Pair Corralation between Walker Dunlop and Nordic Halibut

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.92 times more return on investment than Nordic Halibut. However, Walker Dunlop is 1.08 times less risky than Nordic Halibut. It trades about 0.04 of its potential returns per unit of risk. Nordic Halibut AS is currently generating about -0.05 per unit of risk. If you would invest  9,544  in Walker Dunlop on November 2, 2024 and sell it today you would earn a total of  115.00  from holding Walker Dunlop or generate 1.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy90.48%
ValuesDaily Returns

Walker Dunlop  vs.  Nordic Halibut AS

 Performance 
       Timeline  
Walker Dunlop 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Walker Dunlop has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
Nordic Halibut AS 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Nordic Halibut AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Walker Dunlop and Nordic Halibut Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walker Dunlop and Nordic Halibut

The main advantage of trading using opposite Walker Dunlop and Nordic Halibut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Nordic Halibut 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 Nordic Halibut will offset losses from the drop in Nordic Halibut's long position.
The idea behind Walker Dunlop and Nordic Halibut AS 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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