Correlation Between Walker Dunlop and Manager Directed

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

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

Diversification Opportunities for Walker Dunlop and Manager Directed

0.08

Correlation Coefficient

Walker Dunlop  Manager Directed

Significant diversification

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

Pair Corralation between Walker Dunlop and Manager Directed

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 38.78 times more return on investment than Manager Directed. However, Walker Dunlop is 38.78 times more volatile than Manager Directed Portfolios. It trades about 0.04 of its potential returns per unit of risk. Manager Directed Portfolios is currently generating about 0.37 per unit of risk. If you would invest  10,350  in Walker Dunlop on September 12, 2024 and sell it today you would earn a total of  292.00  from holding Walker Dunlop or generate 2.82% return on investment over 90 days.

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

Walker Dunlop  vs.  Manager Directed Portfolios

Walker Dunlop

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 2 (%) 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.

Manager Directed Por

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Manager Directed Portfolios are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Manager Directed is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Walker Dunlop and Manager Directed

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

The idea behind Walker Dunlop and Manager Directed Portfolios 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 Global Correlations module to find global opportunities by holding instruments from different markets.