Correlation Between Walker Dunlop and General American
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and General American 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 General American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and General American Investors, you can compare the effects of market volatilities on Walker Dunlop and General American 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 General American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and General American.
Diversification Opportunities for Walker Dunlop and General American
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Walker and General is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and General American Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General American Inv 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 General American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General American Inv has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and General American go up and down completely randomly.
Pair Corralation between Walker Dunlop and General American
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 3.2 times more return on investment than General American. However, Walker Dunlop is 3.2 times more volatile than General American Investors. It trades about 0.09 of its potential returns per unit of risk. General American Investors is currently generating about 0.21 per unit of risk. If you would invest 8,100 in Walker Dunlop on February 14, 2024 and sell it today you would earn a total of 1,701 from holding Walker Dunlop or generate 21.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Walker Dunlop vs. General American Investors
Performance |
Timeline |
Walker Dunlop |
General American Inv |
Walker Dunlop and General American Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walker Dunlop and General American
The main advantage of trading using opposite Walker Dunlop and General American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, General American 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 General American will offset losses from the drop in General American's long position.Walker Dunlop vs. Aquagold International | Walker Dunlop vs. Morningstar Unconstrained Allocation | Walker Dunlop vs. FT Cboe Vest |
General American vs. Vanguard Total Stock | General American vs. Vanguard 500 Index | General American vs. Vanguard Total Stock | General American vs. Vanguard Total Stock |
Check out your portfolio center.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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