Correlation Between Walker Dunlop and Global Opportunity

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

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

Diversification Opportunities for Walker Dunlop and Global Opportunity

-0.08

Correlation Coefficient

Walker Dunlop  Global Opportunity

Good diversification

The 3 months correlation between Walker and Global is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Global Opportunity Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Opportunity 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 Global Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Opportunity has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Global Opportunity go up and down completely randomly.

Pair Corralation between Walker Dunlop and Global Opportunity

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Global Opportunity. In addition to that, Walker Dunlop is 1.46 times more volatile than Global Opportunity Portfolio. It trades about -0.08 of its total potential returns per unit of risk. Global Opportunity Portfolio is currently generating about 0.02 per unit of volatility. If you would invest  3,273  in Global Opportunity Portfolio on December 28, 2024 and sell it today you would earn a total of  48.00  from holding Global Opportunity Portfolio or generate 1.47% 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.  Global Opportunity Portfolio

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 latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Global Opportunity

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global Opportunity Portfolio are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Global Opportunity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walker Dunlop and Global Opportunity

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

The idea behind Walker Dunlop and Global Opportunity Portfolio 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.