Correlation Between Walker Dunlop and VanEck Energy

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

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

Diversification Opportunities for Walker Dunlop and VanEck Energy

-0.11

Correlation Coefficient

Walker Dunlop  VanEck Energy

Good diversification

The 3 months correlation between Walker and VanEck is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and VanEck Energy Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Energy Income 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 VanEck Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Energy Income has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and VanEck Energy go up and down completely randomly.

Pair Corralation between Walker Dunlop and VanEck Energy

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the VanEck Energy. In addition to that, Walker Dunlop is 1.55 times more volatile than VanEck Energy Income. It trades about -0.19 of its total potential returns per unit of risk. VanEck Energy Income is currently generating about 0.02 per unit of volatility. If you would invest  9,737  in VanEck Energy Income on December 2, 2024 and sell it today you would earn a total of  125.00  from holding VanEck Energy Income or generate 1.28% return on investment over 90 days.

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

Walker Dunlop  vs.  VanEck Energy Income

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

VanEck Energy Income

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Energy Income are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, VanEck Energy is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Walker Dunlop and VanEck Energy

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

The idea behind Walker Dunlop and VanEck Energy Income 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.