Correlation Between Walker Dunlop and Cisco Systems

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

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

Diversification Opportunities for Walker Dunlop and Cisco Systems

-0.17

Correlation Coefficient

Walker Dunlop  Cisco Systems

Good diversification

The 3 months correlation between Walker and Cisco is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems 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 Cisco Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisco Systems has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Cisco Systems go up and down completely randomly.

Pair Corralation between Walker Dunlop and Cisco Systems

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 6.78 times less return on investment than Cisco Systems. In addition to that, Walker Dunlop is 1.63 times more volatile than Cisco Systems. It trades about 0.02 of its total potential returns per unit of risk. Cisco Systems is currently generating about 0.21 per unit of volatility. If you would invest  4,886  in Cisco Systems on April 25, 2025 and sell it today you would earn a total of  910.00  from holding Cisco Systems or generate 18.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Walker Dunlop  vs.  Cisco Systems

Walker Dunlop

Risk-Adjusted Performance

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Cisco Systems

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cisco Systems are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Cisco Systems reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walker Dunlop and Cisco Systems

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

The idea behind Walker Dunlop and Cisco Systems 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.