Correlation Between Walker Dunlop and Doubleline Total

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

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

Diversification Opportunities for Walker Dunlop and Doubleline Total

0.42

Correlation Coefficient

Walker Dunlop  Doubleline Total

Very weak diversification

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

Pair Corralation between Walker Dunlop and Doubleline Total

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 4.65 times more return on investment than Doubleline Total. However, Walker Dunlop is 4.65 times more volatile than Doubleline Total Return. It trades about 0.03 of its potential returns per unit of risk. Doubleline Total Return is currently generating about -0.03 per unit of risk. If you would invest  9,483  in Walker Dunlop on March 3, 2024 and sell it today you would earn a total of  116.00  from holding Walker Dunlop or generate 1.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.73%
Values	Daily Returns

Walker Dunlop  vs.  Doubleline Total Return

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.

Doubleline Total Return

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doubleline Total Return has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Doubleline Total 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 Doubleline Total

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

The idea behind Walker Dunlop and Doubleline Total Return 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.