Correlation Between Walker Dunlop and EA Series

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

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

Diversification Opportunities for Walker Dunlop and EA Series

0.74

Correlation Coefficient

Walker Dunlop  EA Series

Poor diversification

The 3 months correlation between Walker and CCMG is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust 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 EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and EA Series go up and down completely randomly.

Pair Corralation between Walker Dunlop and EA Series

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.49 times more return on investment than EA Series. However, Walker Dunlop is 2.49 times more volatile than EA Series Trust. It trades about 0.11 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.24 per unit of risk. If you would invest  10,674  in Walker Dunlop on September 4, 2024 and sell it today you would earn a total of  347.00  from holding Walker Dunlop or generate 3.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Walker Dunlop  vs.  EA Series Trust

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.

EA Series Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EA Series Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, EA Series is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Walker Dunlop and EA Series

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

The idea behind Walker Dunlop and EA Series Trust 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.