Correlation Between Walker Dunlop and Madison Investors
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Madison Investors 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 Madison Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Madison Investors Fund, you can compare the effects of market volatilities on Walker Dunlop and Madison Investors 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 Madison Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Madison Investors.
Diversification Opportunities for Walker Dunlop and Madison Investors
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walker and Madison is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Madison Investors Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Investors 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 Madison Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Investors has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Madison Investors go up and down completely randomly.
Pair Corralation between Walker Dunlop and Madison Investors
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 8.87 times less return on investment than Madison Investors. In addition to that, Walker Dunlop is 3.21 times more volatile than Madison Investors Fund. It trades about 0.01 of its total potential returns per unit of risk. Madison Investors Fund is currently generating about 0.35 per unit of volatility. If you would invest 2,927 in Madison Investors Fund on November 4, 2024 and sell it today you would earn a total of 142.00 from holding Madison Investors Fund or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Madison Investors Fund
Performance |
| Timeline |
| Walker Dunlop |
| Madison Investors |
Walker Dunlop and Madison Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Madison Investors
The main advantage of trading using opposite Walker Dunlop and Madison Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Madison Investors 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 Madison Investors will offset losses from the drop in Madison Investors' 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 |
| Madison Investors vs. Matrix Advisors Value | Madison Investors vs. Madison Mid Cap | Madison Investors vs. Fam Value Fund | Madison Investors vs. Sound Shore Fund |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |