Correlation Between Walker Dunlop and Natural Hlth

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Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Natural Hlth 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 Natural Hlth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Natural Hlth Trd, you can compare the effects of market volatilities on Walker Dunlop and Natural Hlth 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 Natural Hlth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Natural Hlth.

Diversification Opportunities for Walker Dunlop and Natural Hlth

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Walker and Natural is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Natural Hlth Trd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Hlth Trd 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 Natural Hlth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Hlth Trd has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Natural Hlth go up and down completely randomly.

Pair Corralation between Walker Dunlop and Natural Hlth

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.02 times more return on investment than Natural Hlth. However, Walker Dunlop is 1.02 times more volatile than Natural Hlth Trd. It trades about 0.05 of its potential returns per unit of risk. Natural Hlth Trd is currently generating about -0.01 per unit of risk. If you would invest  5,727  in Walker Dunlop on June 28, 2022 and sell it today you would earn a total of  3,196  from holding Walker Dunlop or generate 55.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Walker Dunlop  vs.  Natural Hlth Trd

 Performance (%) 
       Timeline  
Walker Dunlop 
Walker Performance
0 of 100
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.

Walker Price Channel

Natural Hlth Trd 
Natural Performance
0 of 100
Over the last 90 days Natural Hlth Trd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in October 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Natural Price Channel

Walker Dunlop and Natural Hlth Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walker Dunlop and Natural Hlth

The main advantage of trading using opposite Walker Dunlop and Natural Hlth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Natural Hlth 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 Natural Hlth will offset losses from the drop in Natural Hlth's long position.
Walker Dunlop vs. BUSHVELD MINERALS LTD
The idea behind Walker Dunlop and Natural Hlth Trd 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.
Natural Hlth vs. BUSHVELD MINERALS LTD
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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