Correlation Between Walker Dunlop and Transport

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

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

Diversification Opportunities for Walker Dunlop and Transport

0.73

Correlation Coefficient

Walker Dunlop  Transport

Poor diversification

The 3 months correlation between Walker and Transport is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Transport and Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport and Industry 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 Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport and Industry has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Transport go up and down completely randomly.

Pair Corralation between Walker Dunlop and Transport

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 6.61 times less return on investment than Transport. But when comparing it to its historical volatility, Walker Dunlop is 1.96 times less risky than Transport. It trades about 0.06 of its potential returns per unit of risk. Transport and Industry is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  173,000  in Transport and Industry on May 12, 2025 and sell it today you would earn a total of  120,000  from holding Transport and Industry or generate 69.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Walker Dunlop  vs.  Transport and Industry

Walker Dunlop

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Walker Dunlop may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Transport and Industry

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Transport and Industry are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Transport displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walker Dunlop and Transport

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

The idea behind Walker Dunlop and Transport and Industry 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.