Correlation Between Walker Dunlop and OSI Systems

Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and OSI 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 OSI 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 OSI Systems, you can compare the effects of market volatilities on Walker Dunlop and OSI 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 OSI Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and OSI Systems.

Diversification Opportunities for Walker Dunlop and OSI Systems

0.24

Correlation Coefficient

Walker Dunlop  OSI Systems

Modest diversification

The 3 months correlation between Walker and OSI is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and OSI Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSI 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 OSI Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSI Systems has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and OSI Systems go up and down completely randomly.

Pair Corralation between Walker Dunlop and OSI Systems

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.01 times more return on investment than OSI Systems. However, Walker Dunlop is 1.01 times more volatile than OSI Systems. It trades about 0.19 of its potential returns per unit of risk. OSI Systems is currently generating about 0.03 per unit of risk. If you would invest  6,717  in Walker Dunlop on May 21, 2025 and sell it today you would earn a total of  1,689  from holding Walker Dunlop or generate 25.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Walker Dunlop  vs.  OSI Systems

Walker Dunlop

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Walker Dunlop exhibited solid returns over the last few months and may actually be approaching a breakup point.

OSI Systems

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OSI Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, OSI Systems is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Walker Dunlop and OSI Systems

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

The idea behind Walker Dunlop and OSI 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.