Correlation Between Walker Dunlop and Emerging Markets

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Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Emerging Markets 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 Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Emerging Markets Value, you can compare the effects of market volatilities on Walker Dunlop and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Emerging Markets.

Diversification Opportunities for Walker Dunlop and Emerging Markets

WalkerEmergingDiversified AwayWalkerEmergingDiversified Away100%
0.27
  Correlation Coefficient

Modest diversification

The 3 months correlation between Walker and Emerging is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Emerging Markets Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Value has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Emerging Markets go up and down completely randomly.

Pair Corralation between Walker Dunlop and Emerging Markets

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Emerging Markets. In addition to that, Walker Dunlop is 3.27 times more volatile than Emerging Markets Value. It trades about -0.35 of its total potential returns per unit of risk. Emerging Markets Value is currently generating about 0.35 per unit of volatility. If you would invest  3,012  in Emerging Markets Value on November 25, 2024 and sell it today you would earn a total of  121.00  from holding Emerging Markets Value or generate 4.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Walker Dunlop  vs.  Emerging Markets Value

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-505
JavaScript chart by amCharts 3.21.15WD DFEVX
       Timeline  
Walker Dunlop 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Walker Dunlop has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb859095100105110115
Emerging Markets Value 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Emerging Markets Value are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Emerging Markets is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2929.53030.53131.5

Walker Dunlop and Emerging Markets Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.44-2.57-1.71-0.850.00.71.412.132.853.57 0.20.40.60.81.01.2
JavaScript chart by amCharts 3.21.15WD DFEVX
       Returns  

Pair Trading with Walker Dunlop and Emerging Markets

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

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