Correlation Between Walker Dunlop and Gold Portfolio

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

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

Diversification Opportunities for Walker Dunlop and Gold Portfolio

-0.28

Correlation Coefficient

Walker Dunlop  Gold Portfolio

Very good diversification

The 3 months correlation between Walker and Gold is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Gold Portfolio Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Portfolio Gold 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 Gold Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Portfolio Gold has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Gold Portfolio go up and down completely randomly.

Pair Corralation between Walker Dunlop and Gold Portfolio

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.34 times less return on investment than Gold Portfolio. In addition to that, Walker Dunlop is 1.25 times more volatile than Gold Portfolio Gold. It trades about 0.03 of its total potential returns per unit of risk. Gold Portfolio Gold is currently generating about 0.04 per unit of volatility. If you would invest  2,161  in Gold Portfolio Gold on December 2, 2024 and sell it today you would earn a total of  733.00  from holding Gold Portfolio Gold or generate 33.92% 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.  Gold Portfolio Gold

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.

Gold Portfolio Gold

Risk-Adjusted Performance

OK

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

Pair Trading with Walker Dunlop and Gold Portfolio

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

The idea behind Walker Dunlop and Gold Portfolio Gold 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 Transaction History module to view history of all your transactions and understand their impact on performance.