Correlation Between Walker Dunlop and Valic Company

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

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

Diversification Opportunities for Walker Dunlop and Valic Company

-0.67

Correlation Coefficient

Walker Dunlop  Valic Company

Excellent diversification

The 3 months correlation between Walker and Valic is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I 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 Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Valic Company go up and down completely randomly.

Pair Corralation between Walker Dunlop and Valic Company

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Valic Company. In addition to that, Walker Dunlop is 6.25 times more volatile than Valic Company I. It trades about -0.09 of its total potential returns per unit of risk. Valic Company I is currently generating about 0.13 per unit of volatility. If you would invest  941.00  in Valic Company I on December 27, 2024 and sell it today you would earn a total of  22.00  from holding Valic Company I or generate 2.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Walker Dunlop  vs.  Valic Company I

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.

Valic Company I

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Valic Company I are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Valic Company 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 Valic Company

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

The idea behind Walker Dunlop and Valic Company I 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.