Correlation Between Walker Dunlop and Fidelity Global

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

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

Diversification Opportunities for Walker Dunlop and Fidelity Global

0.04

Correlation Coefficient

Walker Dunlop  Fidelity Global

Significant diversification

The 3 months correlation between Walker and Fidelity is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Fidelity Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Value 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 Fidelity Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Value has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Fidelity Global go up and down completely randomly.

Pair Corralation between Walker Dunlop and Fidelity Global

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.59 times more return on investment than Fidelity Global. However, Walker Dunlop is 1.59 times more volatile than Fidelity Global Value. It trades about 0.03 of its potential returns per unit of risk. Fidelity Global Value is currently generating about -0.03 per unit of risk. If you would invest  7,313  in Walker Dunlop on December 2, 2024 and sell it today you would earn a total of  1,254  from holding Walker Dunlop or generate 17.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	54.34%
Values	Daily Returns

Walker Dunlop  vs.  Fidelity Global Value

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.

Fidelity Global Value

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Global Value are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Fidelity Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Walker Dunlop and Fidelity Global

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

The idea behind Walker Dunlop and Fidelity Global Value 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.