Correlation Between Walker Dunlop and Janus Henderson

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

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

Diversification Opportunities for Walker Dunlop and Janus Henderson

0.42

Correlation Coefficient

Walker Dunlop  Janus Henderson

Very weak diversification

The 3 months correlation between Walker and Janus is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Janus Henderson Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Short 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 Janus Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Henderson Short has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Janus Henderson go up and down completely randomly.

Pair Corralation between Walker Dunlop and Janus Henderson

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 32.6 times more return on investment than Janus Henderson. However, Walker Dunlop is 32.6 times more volatile than Janus Henderson Short. It trades about 0.05 of its potential returns per unit of risk. Janus Henderson Short is currently generating about 0.44 per unit of risk. If you would invest  10,641  in Walker Dunlop on August 30, 2024 and sell it today you would earn a total of  441.00  from holding Walker Dunlop or generate 4.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Walker Dunlop  vs.  Janus Henderson Short

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.

Janus Henderson Short

Risk-Adjusted Performance

34 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Henderson Short are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Janus Henderson is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walker Dunlop and Janus Henderson

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

The idea behind Walker Dunlop and Janus Henderson Short 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.