Correlation Between Walker Dunlop and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Mainstay Moderate 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 Mainstay Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Mainstay Moderate Allocation, you can compare the effects of market volatilities on Walker Dunlop and Mainstay Moderate 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 Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Mainstay Moderate.
Diversification Opportunities for Walker Dunlop and Mainstay Moderate
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and Mainstay is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Mainstay Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate 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 Mainstay Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Walker Dunlop and Mainstay Moderate
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 4.36 times more return on investment than Mainstay Moderate. However, Walker Dunlop is 4.36 times more volatile than Mainstay Moderate Allocation. It trades about 0.04 of its potential returns per unit of risk. Mainstay Moderate Allocation is currently generating about 0.09 per unit of risk. If you would invest 7,967 in Walker Dunlop on September 3, 2024 and sell it today you would earn a total of 3,051 from holding Walker Dunlop or generate 38.3% 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. Mainstay Moderate Allocation
Performance |
| Timeline |
| Walker Dunlop |
| Mainstay Moderate |
Walker Dunlop and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Mainstay Moderate
The main advantage of trading using opposite Walker Dunlop and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Mainstay Moderate 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 Mainstay Moderate will offset losses from the drop in Mainstay Moderate'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 |
| Mainstay Moderate vs. Calamos Dynamic Convertible | Mainstay Moderate vs. Absolute Convertible Arbitrage | Mainstay Moderate vs. Gabelli Convertible And | Mainstay Moderate vs. Lord Abbett Convertible |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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