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
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and First is 0.71. 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 generate 4.09 times more return on investment than First Eagle. However, Walker Dunlop is 4.09 times more volatile than First Eagle Global. It trades about 0.0 of its potential returns per unit of risk. First Eagle Global is currently generating about -0.09 per unit of risk. If you would invest 11,127 in Walker Dunlop on August 30, 2024 and sell it today you would lose (45.00) from holding Walker Dunlop or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| 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. Mr Cooper Group | Walker Dunlop vs. Velocity Financial Llc | Walker Dunlop vs. Security National Financial | Walker Dunlop vs. Encore Capital Group |
| First Eagle vs. Wasatch Small Cap | First Eagle vs. Tax Managed Mid Small | First Eagle vs. Lord Abbett Diversified | First Eagle vs. American Century Diversified |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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