Correlation Between Walker Dunlop and Utilities Fund

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

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

Diversification Opportunities for Walker Dunlop and Utilities Fund

0.74

Correlation Coefficient

Walker Dunlop  Utilities Fund

Poor diversification

The 3 months correlation between Walker and Utilities is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Utilities Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Fund Investor 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 Utilities Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Fund Investor has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Utilities Fund go up and down completely randomly.

Pair Corralation between Walker Dunlop and Utilities Fund

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.16 times more return on investment than Utilities Fund. However, Walker Dunlop is 2.16 times more volatile than Utilities Fund Investor. It trades about 0.02 of its potential returns per unit of risk. Utilities Fund Investor is currently generating about 0.03 per unit of risk. If you would invest  8,984  in Walker Dunlop on October 23, 2024 and sell it today you would earn a total of  550.00  from holding Walker Dunlop or generate 6.12% return on investment over 90 days.

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

Walker Dunlop  vs.  Utilities Fund Investor

Walker Dunlop

Risk-Adjusted Performance

0 of 100

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

Utilities Fund Investor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Utilities Fund Investor has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Utilities Fund 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 Utilities Fund

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

The idea behind Walker Dunlop and Utilities Fund Investor 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.