Correlation Between Walker Dunlop and ETF Series
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and ETF Series 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 ETF Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and ETF Series Solutions, you can compare the effects of market volatilities on Walker Dunlop and ETF Series 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and ETF Series.
Diversification Opportunities for Walker Dunlop and ETF Series
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and ETF is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and ETF Series go up and down completely randomly.
Pair Corralation between Walker Dunlop and ETF Series
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.4 times more return on investment than ETF Series. However, Walker Dunlop is 2.4 times more volatile than ETF Series Solutions. It trades about 0.08 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.02 per unit of risk. If you would invest 9,351 in Walker Dunlop on September 1, 2024 and sell it today you would earn a total of 1,667 from holding Walker Dunlop or generate 17.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Walker Dunlop vs. ETF Series Solutions
Performance |
| Timeline |
| Walker Dunlop |
| ETF Series Solutions |
Walker Dunlop and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and ETF Series
The main advantage of trading using opposite Walker Dunlop and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' 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 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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