Correlation Between Walker Dunlop and IShares IBonds

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

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

Diversification Opportunities for Walker Dunlop and IShares IBonds

0.55

Correlation Coefficient

Walker Dunlop  IShares IBonds

Very weak diversification

The 3 months correlation between Walker and IShares is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and iShares iBonds Dec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iBonds Dec 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 IShares IBonds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares iBonds Dec has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and IShares IBonds go up and down completely randomly.

Pair Corralation between Walker Dunlop and IShares IBonds

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 19.41 times more return on investment than IShares IBonds. However, Walker Dunlop is 19.41 times more volatile than iShares iBonds Dec. It trades about 0.06 of its potential returns per unit of risk. iShares iBonds Dec is currently generating about 0.18 per unit of risk. If you would invest  10,435  in Walker Dunlop on September 3, 2024 and sell it today you would earn a total of  583.00  from holding Walker Dunlop or generate 5.59% return on investment over 90 days.

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

Walker Dunlop  vs.  iShares iBonds Dec

Walker Dunlop

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 4 (%) 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.

iShares iBonds Dec

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares iBonds Dec are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, IShares IBonds is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Walker Dunlop and IShares IBonds

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

The idea behind Walker Dunlop and iShares iBonds Dec 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.

Check out your portfolio center.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.