Correlation Between Walker Dunlop and Vanguard FTSE

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

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

Diversification Opportunities for Walker Dunlop and Vanguard FTSE

-0.73

Correlation Coefficient

Walker Dunlop  Vanguard FTSE

Pay attention - limited upside

The 3 months correlation between Walker and Vanguard is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Vanguard FTSE Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE Europe 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 Vanguard FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE Europe has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Vanguard FTSE go up and down completely randomly.

Pair Corralation between Walker Dunlop and Vanguard FTSE

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Vanguard FTSE. In addition to that, Walker Dunlop is 2.8 times more volatile than Vanguard FTSE Europe. It trades about -0.1 of its total potential returns per unit of risk. Vanguard FTSE Europe is currently generating about 0.26 per unit of volatility. If you would invest  7,281  in Vanguard FTSE Europe on December 26, 2024 and sell it today you would earn a total of  864.00  from holding Vanguard FTSE Europe or generate 11.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Walker Dunlop  vs.  Vanguard FTSE Europe

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.

Vanguard FTSE Europe

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard FTSE Europe are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Vanguard FTSE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Walker Dunlop and Vanguard FTSE

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

The idea behind Walker Dunlop and Vanguard FTSE Europe 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.