Correlation Between Walker Dunlop and First American
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and First American 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 American 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 American Funds, you can compare the effects of market volatilities on Walker Dunlop and First American 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 American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and First American.
Diversification Opportunities for Walker Dunlop and First American
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and First is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and First American Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First American Funds 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 American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First American Funds has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and First American go up and down completely randomly.
Pair Corralation between Walker Dunlop and First American
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 11.77 times more return on investment than First American. However, Walker Dunlop is 11.77 times more volatile than First American Funds. It trades about 0.08 of its potential returns per unit of risk. First American Funds 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. First American Funds
Performance |
| Timeline |
| Walker Dunlop |
| First American Funds |
Walker Dunlop and First American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and First American
The main advantage of trading using opposite Walker Dunlop and First American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, First American 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 American will offset losses from the drop in First American's long position.| Walker Dunlop vs. Encore Capital Group | Walker Dunlop vs. Federal Home Loan | Walker Dunlop vs. CNFinance Holdings | Walker Dunlop vs. Greystone Housing Impact |
| First American vs. Vanguard Total Stock | First American vs. Vanguard 500 Index | First American vs. Vanguard Total Stock | First American vs. Vanguard Total Stock |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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