Correlation Between Walker Dunlop and Kaia

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

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

Diversification Opportunities for Walker Dunlop and Kaia

-0.21

Correlation Coefficient

Walker Dunlop  Kaia

Very good diversification

The 3 months correlation between Walker and Kaia is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Kaia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaia 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 Kaia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaia has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Kaia go up and down completely randomly.

Pair Corralation between Walker Dunlop and Kaia

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Kaia. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 2.16 times less risky than Kaia. The stock trades about -0.15 of its potential returns per unit of risk. The Kaia is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Kaia on March 7, 2025 and sell it today you would lose (1.00) from holding Kaia or give up 9.09% of portfolio value over 90 days.

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

Walker Dunlop  vs.  Kaia

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 July 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Kaia

Risk-Adjusted Performance

Weak

Over the last 90 days Kaia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Kaia is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Walker Dunlop and Kaia

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

The idea behind Walker Dunlop and Kaia 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.