Correlation Between Guild Holdings and Walker Dunlop

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

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

Diversification Opportunities for Guild Holdings and Walker Dunlop

0.34

Correlation Coefficient

Guild Holdings  Walker Dunlop

Weak diversification

The 3 months correlation between Guild and Walker is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Guild Holdings Co and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop and Guild Holdings 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 Guild Holdings Co are associated (or correlated) with Walker Dunlop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walker Dunlop has no effect on the direction of Guild Holdings i.e., Guild Holdings and Walker Dunlop go up and down completely randomly.

Pair Corralation between Guild Holdings and Walker Dunlop

Given the investment horizon of 90 days Guild Holdings Co is expected to generate 1.04 times more return on investment than Walker Dunlop. However, Guild Holdings is 1.04 times more volatile than Walker Dunlop. It trades about -0.07 of its potential returns per unit of risk. Walker Dunlop is currently generating about -0.29 per unit of risk. If you would invest  1,287  in Guild Holdings Co on November 29, 2024 and sell it today you would lose (45.00) from holding Guild Holdings Co or give up 3.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Guild Holdings Co  vs.  Walker Dunlop

Guild Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guild Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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

Pair Trading with Guild Holdings and Walker Dunlop

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

The idea behind Guild Holdings Co and Walker Dunlop 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.