Correlation Between Walker Dunlop and Income Fund
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Income Fund 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 Income Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Income Fund Of, you can compare the effects of market volatilities on Walker Dunlop and Income Fund 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 Income Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Income Fund.
Diversification Opportunities for Walker Dunlop and Income Fund
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walker and Income is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Income Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Fund 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 Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Income Fund go up and down completely randomly.
Pair Corralation between Walker Dunlop and Income Fund
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 3.9 times more return on investment than Income Fund. However, Walker Dunlop is 3.9 times more volatile than Income Fund Of. It trades about 0.08 of its potential returns per unit of risk. Income Fund Of is currently generating about 0.16 per unit of risk. If you would invest 9,215 in Walker Dunlop on August 25, 2024 and sell it today you would earn a total of 1,634 from holding Walker Dunlop or generate 17.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Income Fund Of
Performance |
| Timeline |
| Walker Dunlop |
| Income Fund |
Walker Dunlop and Income Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Income Fund
The main advantage of trading using opposite Walker Dunlop and Income Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Income Fund 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 Income Fund will offset losses from the drop in Income Fund'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 |
| Income Fund vs. American Century Etf | Income Fund vs. Hennessy Nerstone Mid | Income Fund vs. Palm Valley Capital | Income Fund vs. Northern Small Cap |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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