Correlation Between Walker Dunlop and 694308JU2

Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and 694308JU2 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 694308JU2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Walker Dunlop and PCG 42 01 JUN 41, you can compare the effects of market volatilities on Walker Dunlop and 694308JU2 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 694308JU2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and 694308JU2.

Diversification Opportunities for Walker Dunlop and 694308JU2

-0.45

Correlation Coefficient

Walker Dunlop  694308JU2

Very good diversification

The 3 months correlation between Walker and 694308JU2 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and PCG 42 01 JUN 41 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCG 42 01 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 694308JU2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCG 42 01 has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and 694308JU2 go up and down completely randomly.

Pair Corralation between Walker Dunlop and 694308JU2

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.92 times more return on investment than 694308JU2. However, Walker Dunlop is 1.09 times less risky than 694308JU2. It trades about -0.08 of its potential returns per unit of risk. PCG 42 01 JUN 41 is currently generating about -0.18 per unit of risk. If you would invest  9,788  in Walker Dunlop on December 25, 2024 and sell it today you would lose (1,016) from holding Walker Dunlop or give up 10.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	79.66%
Values	Daily Returns

Walker Dunlop  vs.  PCG 42 01 JUN 41

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.

PCG 42 01

Risk-Adjusted Performance

Very Weak

Over the last 90 days PCG 42 01 JUN 41 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for PCG 42 01 JUN 41 investors.

Pair Trading with Walker Dunlop and 694308JU2

The main advantage of trading using opposite Walker Dunlop and 694308JU2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, 694308JU2 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 694308JU2 will offset losses from the drop in 694308JU2's long position.

The idea behind Walker Dunlop and PCG 42 01 JUN 41 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.