Correlation Between Walker Dunlop and InTest

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

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

Diversification Opportunities for Walker Dunlop and InTest

0.64

Correlation Coefficient

Walker Dunlop  InTest

Poor diversification

The 3 months correlation between Walker and InTest is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and inTest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on inTest 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 InTest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of inTest has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and InTest go up and down completely randomly.

Pair Corralation between Walker Dunlop and InTest

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the InTest. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 2.16 times less risky than InTest. The stock trades about 0.0 of its potential returns per unit of risk. The inTest is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,122  in inTest on January 25, 2024 and sell it today you would lose (17.00) from holding inTest or give up 1.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Walker Dunlop  vs.  inTest

Walker Dunlop

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Walker Dunlop has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

inTest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days inTest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Walker Dunlop and InTest

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

The idea behind Walker Dunlop and inTest 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .