Correlation Between Walker Dunlop and Baillie Gifford

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

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

Diversification Opportunities for Walker Dunlop and Baillie Gifford

-0.57

Correlation Coefficient

Walker Dunlop  Baillie Gifford

Excellent diversification

The 3 months correlation between Walker and Baillie is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Baillie Gifford International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Inte 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 Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford Inte has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Baillie Gifford go up and down completely randomly.

Pair Corralation between Walker Dunlop and Baillie Gifford

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Baillie Gifford. In addition to that, Walker Dunlop is 1.15 times more volatile than Baillie Gifford International. It trades about -0.08 of its total potential returns per unit of risk. Baillie Gifford International is currently generating about 0.07 per unit of volatility. If you would invest  758.00  in Baillie Gifford International on December 28, 2024 and sell it today you would earn a total of  46.00  from holding Baillie Gifford International or generate 6.07% return on investment over 90 days.

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

Walker Dunlop  vs.  Baillie Gifford International

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 latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Baillie Gifford Inte

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Baillie Gifford International are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Baillie Gifford may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Walker Dunlop and Baillie Gifford

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

The idea behind Walker Dunlop and Baillie Gifford International 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.