Correlation Between Walker Dunlop and IShares Regional
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and IShares Regional 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 IShares Regional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and iShares Regional Banks, you can compare the effects of market volatilities on Walker Dunlop and IShares Regional 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 IShares Regional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and IShares Regional.
Diversification Opportunities for Walker Dunlop and IShares Regional
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and IShares is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and iShares Regional Banks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Regional Banks 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 IShares Regional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Regional Banks has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and IShares Regional go up and down completely randomly.
Pair Corralation between Walker Dunlop and IShares Regional
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the IShares Regional. In addition to that, Walker Dunlop is 1.52 times more volatile than iShares Regional Banks. It trades about -0.42 of its total potential returns per unit of risk. iShares Regional Banks is currently generating about -0.24 per unit of volatility. If you would invest 5,346 in iShares Regional Banks on November 27, 2024 and sell it today you would lose (294.00) from holding iShares Regional Banks or give up 5.5% 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. iShares Regional Banks
Performance |
| Timeline |
| Walker Dunlop |
| iShares Regional Banks |
Walker Dunlop and IShares Regional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and IShares Regional
The main advantage of trading using opposite Walker Dunlop and IShares Regional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, IShares Regional 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 IShares Regional will offset losses from the drop in IShares Regional'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 |
| IShares Regional vs. iShares Broker Dealers Securities | IShares Regional vs. iShares Insurance ETF | IShares Regional vs. iShares Financial Services | IShares Regional vs. iShares Financials ETF |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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