Correlation Between Walker Dunlop and Revlon

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

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

Diversification Opportunities for Walker Dunlop and Revlon

0.38

Correlation Coefficient

Walker Dunlop  Revlon

Weak diversification

The 3 months correlation between Walker and Revlon is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Revlon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revlon Inc 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 Revlon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revlon Inc has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Revlon go up and down completely randomly.

Pair Corralation between Walker Dunlop and Revlon

If you would invest  39.00  in Revlon Inc on January 20, 2024 and sell it today you would earn a total of  0.00  from holding Revlon Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Walker Dunlop  vs.  Revlon Inc

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 latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Revlon Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Revlon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Revlon is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Walker Dunlop and Revlon

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

The idea behind Walker Dunlop and Revlon Inc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.