Correlation Between Walker Dunlop and Small Cap
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Small Cap 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 Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Small Cap Value, you can compare the effects of market volatilities on Walker Dunlop and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Small Cap.
Diversification Opportunities for Walker Dunlop and Small Cap
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walker and SMALL is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Value 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 Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Value has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Small Cap go up and down completely randomly.
Pair Corralation between Walker Dunlop and Small Cap
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.65 times more return on investment than Small Cap. However, Walker Dunlop is 1.65 times more volatile than Small Cap Value. It trades about 0.09 of its potential returns per unit of risk. Small Cap Value is currently generating about 0.09 per unit of risk. If you would invest 6,931 in Walker Dunlop on September 4, 2024 and sell it today you would earn a total of 4,090 from holding Walker Dunlop or generate 59.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
Walker Dunlop vs. Small Cap Value
Performance |
| Timeline |
| Walker Dunlop |
| Small Cap Value |
Walker Dunlop and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Small Cap
The main advantage of trading using opposite Walker Dunlop and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap'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 |
| Small Cap vs. Mid Cap Value | Small Cap vs. Equity Growth Fund | Small Cap vs. Income Growth Fund | Small Cap vs. Diversified Bond Fund |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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