Correlation Between Walker Dunlop and Edison International

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

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

Diversification Opportunities for Walker Dunlop and Edison International

-0.72

Correlation Coefficient

Walker Dunlop  Edison International

Pay attention - limited upside

The 3 months correlation between Walker and Edison is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Edison International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edison International 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 Edison International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edison International has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Edison International go up and down completely randomly.

Pair Corralation between Walker Dunlop and Edison International

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Edison International. In addition to that, Walker Dunlop is 1.59 times more volatile than Edison International. It trades about -0.19 of its total potential returns per unit of risk. Edison International is currently generating about 0.06 per unit of volatility. If you would invest  5,394  in Edison International on September 9, 2025 and sell it today you would earn a total of  247.00  from holding Edison International or generate 4.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Walker Dunlop  vs.  Edison International

Walker Dunlop

Risk-Adjusted Performance

Weakest

Over the last 90 days Walker Dunlop has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2026. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Edison International

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Edison International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward indicators, Edison International is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walker Dunlop and Edison International

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

The idea behind Walker Dunlop and Edison International 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.