Correlation Between Embrace Change and Walker Dunlop

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

By analyzing existing cross correlation between Embrace Change Acquisition and Walker Dunlop, you can compare the effects of market volatilities on Embrace Change and Walker Dunlop 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 Embrace Change with a short position of Walker Dunlop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embrace Change and Walker Dunlop.

Diversification Opportunities for Embrace Change and Walker Dunlop

-0.39

Correlation Coefficient

Embrace Change  Walker Dunlop

Very good diversification

The 3 months correlation between Embrace and Walker is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Embrace Change Acquisition and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop and Embrace Change 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 Embrace Change Acquisition are associated (or correlated) with Walker Dunlop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walker Dunlop has no effect on the direction of Embrace Change i.e., Embrace Change and Walker Dunlop go up and down completely randomly.

Pair Corralation between Embrace Change and Walker Dunlop

Assuming the 90 days horizon Embrace Change Acquisition is expected to generate 6.02 times more return on investment than Walker Dunlop. However, Embrace Change is 6.02 times more volatile than Walker Dunlop. It trades about 0.06 of its potential returns per unit of risk. Walker Dunlop is currently generating about -0.15 per unit of risk. If you would invest  14.00  in Embrace Change Acquisition on February 3, 2025 and sell it today you would earn a total of  0.00  from holding Embrace Change Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	57.81%
Values	Daily Returns

Embrace Change Acquisition  vs.  Walker Dunlop

Embrace Change Acqui

Risk-Adjusted Performance

Insignificant

Over the last 90 days Embrace Change Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak technical and fundamental indicators, Embrace Change reported solid returns over the last few months and may actually be approaching a breakup point.

Walker Dunlop

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in June 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Embrace Change and Walker Dunlop

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

The idea behind Embrace Change Acquisition and Walker Dunlop 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.