Correlation Between Walker Dunlop and American Balanced
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and American Balanced 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 American Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and American Balanced Fund, you can compare the effects of market volatilities on Walker Dunlop and American Balanced 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 American Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and American Balanced.
Diversification Opportunities for Walker Dunlop and American Balanced
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and American is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and American Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Balanced 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 American Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Balanced has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and American Balanced go up and down completely randomly.
Pair Corralation between Walker Dunlop and American Balanced
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the American Balanced. In addition to that, Walker Dunlop is 3.69 times more volatile than American Balanced Fund. It trades about -0.02 of its total potential returns per unit of risk. American Balanced Fund is currently generating about 0.08 per unit of volatility. If you would invest 3,627 in American Balanced Fund on August 29, 2024 and sell it today you would earn a total of 54.00 from holding American Balanced Fund or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. American Balanced Fund
Performance |
| Timeline |
| Walker Dunlop |
| American Balanced |
Walker Dunlop and American Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and American Balanced
The main advantage of trading using opposite Walker Dunlop and American Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, American Balanced 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 American Balanced will offset losses from the drop in American Balanced's long position.| Walker Dunlop vs. Mr Cooper Group | Walker Dunlop vs. Velocity Financial Llc | Walker Dunlop vs. Security National Financial | Walker Dunlop vs. Encore Capital Group |
| American Balanced vs. Franklin High Yield | American Balanced vs. Ishares Municipal Bond | American Balanced vs. T Rowe Price | American Balanced vs. Counterpoint Tactical Municipal |
Check out your portfolio center.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |