Correlation Between Walker Dunlop and First Eagle
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and First Eagle 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 First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and First Eagle Global, you can compare the effects of market volatilities on Walker Dunlop and First Eagle 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 First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and First Eagle.
Diversification Opportunities for Walker Dunlop and First Eagle
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walker and First is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and First Eagle Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Global 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 First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Global has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and First Eagle go up and down completely randomly.
Pair Corralation between Walker Dunlop and First Eagle
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the First Eagle. In addition to that, Walker Dunlop is 5.18 times more volatile than First Eagle Global. It trades about -0.03 of its total potential returns per unit of risk. First Eagle Global is currently generating about 0.35 per unit of volatility. If you would invest 1,301 in First Eagle Global on November 1, 2024 and sell it today you would earn a total of 39.00 from holding First Eagle Global or generate 3.0% 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. First Eagle Global
Performance |
| Timeline |
| Walker Dunlop |
| First Eagle Global |
Walker Dunlop and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and First Eagle
The main advantage of trading using opposite Walker Dunlop and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.| Walker Dunlop vs. Guild Holdings Co | Walker Dunlop vs. Security National Financial | Walker Dunlop vs. Encore Capital Group |
| First Eagle vs. First Eagle Global | First Eagle vs. First Eagle Global | First Eagle vs. First Eagle Fund | First Eagle vs. First Eagle 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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