Correlation Between Walker Dunlop and Real Estate

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

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

Diversification Opportunities for Walker Dunlop and Real Estate

0.01

Correlation Coefficient

Walker Dunlop  Real Estate

Significant diversification

The 3 months correlation between Walker and Real is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Real Estate Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Investment 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 Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Investment has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Real Estate go up and down completely randomly.

Pair Corralation between Walker Dunlop and Real Estate

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.22 times more return on investment than Real Estate. However, Walker Dunlop is 2.22 times more volatile than Real Estate Investment. It trades about 0.02 of its potential returns per unit of risk. Real Estate Investment is currently generating about -0.01 per unit of risk. If you would invest  10,115  in Walker Dunlop on September 12, 2024 and sell it today you would earn a total of  527.00  from holding Walker Dunlop or generate 5.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Walker Dunlop  vs.  Real Estate Investment

Walker Dunlop

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 2 (%) 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.

Real Estate Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Real Estate Investment has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's technical indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Walker Dunlop and Real Estate

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

The idea behind Walker Dunlop and Real Estate Investment 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.