Correlation Between Walker Dunlop and Viemed Healthcare

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

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

Diversification Opportunities for Walker Dunlop and Viemed Healthcare

0.57

Correlation Coefficient

Walker Dunlop  Viemed Healthcare

Very weak diversification

The 3 months correlation between Walker and Viemed is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare 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 Viemed Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viemed Healthcare has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Viemed Healthcare go up and down completely randomly.

Pair Corralation between Walker Dunlop and Viemed Healthcare

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Viemed Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 1.12 times less risky than Viemed Healthcare. The stock trades about -0.17 of its potential returns per unit of risk. The Viemed Healthcare is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  908.00  in Viemed Healthcare on August 17, 2024 and sell it today you would lose (2.00) from holding Viemed Healthcare or give up 0.22% of portfolio value over 90 days.

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

Walker Dunlop  vs.  Viemed Healthcare

Walker Dunlop

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 3 (%) 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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Viemed Healthcare

Risk-Adjusted Performance

14 of 100

Good

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

Pair Trading with Walker Dunlop and Viemed Healthcare

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

The idea behind Walker Dunlop and Viemed Healthcare 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.