Correlation Between Walker Dunlop and IShares Treasury

Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and IShares Treasury 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 Treasury 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 Treasury Floating, you can compare the effects of market volatilities on Walker Dunlop and IShares Treasury 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 Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and IShares Treasury.

Diversification Opportunities for Walker Dunlop and IShares Treasury

-0.45

Correlation Coefficient

Walker Dunlop  IShares Treasury

Very good diversification

The 3 months correlation between Walker and IShares is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and iShares Treasury Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Treasury Floating 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 Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Treasury Floating has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and IShares Treasury go up and down completely randomly.

Pair Corralation between Walker Dunlop and IShares Treasury

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the IShares Treasury. In addition to that, Walker Dunlop is 98.93 times more volatile than iShares Treasury Floating. It trades about -0.09 of its total potential returns per unit of risk. iShares Treasury Floating is currently generating about 0.87 per unit of volatility. If you would invest  5,012  in iShares Treasury Floating on December 28, 2024 and sell it today you would earn a total of  53.00  from holding iShares Treasury Floating or generate 1.06% return on investment over 90 days.

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

Walker Dunlop  vs.  iShares Treasury Floating

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.

iShares Treasury Floating

Risk-Adjusted Performance

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Treasury Floating are ranked lower than 69 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, IShares Treasury is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Walker Dunlop and IShares Treasury

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

The idea behind Walker Dunlop and iShares Treasury Floating 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.