Correlation Between Walker Dunlop and CSB Bank

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

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

Diversification Opportunities for Walker Dunlop and CSB Bank

0.39

Correlation Coefficient

Walker Dunlop  CSB Bank

Weak diversification

The 3 months correlation between Walker and CSB is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and CSB Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSB Bank Limited 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 CSB Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSB Bank Limited has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and CSB Bank go up and down completely randomly.

Pair Corralation between Walker Dunlop and CSB Bank

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 4.11 times less return on investment than CSB Bank. In addition to that, Walker Dunlop is 1.55 times more volatile than CSB Bank Limited. It trades about 0.03 of its total potential returns per unit of risk. CSB Bank Limited is currently generating about 0.2 per unit of volatility. If you would invest  35,235  in CSB Bank Limited on May 2, 2025 and sell it today you would earn a total of  6,870  from holding CSB Bank Limited or generate 19.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.85%
Values	Daily Returns

Walker Dunlop  vs.  CSB Bank Limited

Walker Dunlop

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 2 (%) 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.

CSB Bank Limited

Risk-Adjusted Performance

Solid

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

Pair Trading with Walker Dunlop and CSB Bank

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

The idea behind Walker Dunlop and CSB Bank Limited 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.