Correlation Between Walker Dunlop and First Trust
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and First Trust 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 Trust 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 Trust Intermediate, you can compare the effects of market volatilities on Walker Dunlop and First Trust 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 Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and First Trust.
Diversification Opportunities for Walker Dunlop and First Trust
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and First is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and First Trust Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Intermediate 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 Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Intermediate has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and First Trust go up and down completely randomly.
Pair Corralation between Walker Dunlop and First Trust
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.29 times more return on investment than First Trust. However, Walker Dunlop is 2.29 times more volatile than First Trust Intermediate. It trades about 0.03 of its potential returns per unit of risk. First Trust Intermediate is currently generating about 0.04 per unit of risk. If you would invest 8,943 in Walker Dunlop on August 27, 2024 and sell it today you would earn a total of 1,906 from holding Walker Dunlop or generate 21.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. First Trust Intermediate
Performance |
| Timeline |
| Walker Dunlop |
| First Trust Intermediate |
Walker Dunlop and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and First Trust
The main advantage of trading using opposite Walker Dunlop and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, First Trust 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 Trust will offset losses from the drop in First Trust'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 Trust vs. RiverNorth Flexible Municipalome | First Trust vs. DWS Municipal Income | First Trust vs. Blackrock Munivest | First Trust vs. MFS Municipal Income |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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