Correlation Between Walker Dunlop and PIMCO Preferred
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and PIMCO Preferred 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 PIMCO Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and PIMCO Preferred And, you can compare the effects of market volatilities on Walker Dunlop and PIMCO Preferred 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 PIMCO Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and PIMCO Preferred.
Diversification Opportunities for Walker Dunlop and PIMCO Preferred
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and PIMCO is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and PIMCO Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Preferred And 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 PIMCO Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Preferred And has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and PIMCO Preferred go up and down completely randomly.
Pair Corralation between Walker Dunlop and PIMCO Preferred
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the PIMCO Preferred. In addition to that, Walker Dunlop is 6.87 times more volatile than PIMCO Preferred And. It trades about -0.09 of its total potential returns per unit of risk. PIMCO Preferred And is currently generating about -0.04 per unit of volatility. If you would invest 5,088 in PIMCO Preferred And on August 26, 2024 and sell it today you would lose (8.00) from holding PIMCO Preferred And or give up 0.16% 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. PIMCO Preferred And
Performance |
| Timeline |
| Walker Dunlop |
| PIMCO Preferred And |
Walker Dunlop and PIMCO Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and PIMCO Preferred
The main advantage of trading using opposite Walker Dunlop and PIMCO Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, PIMCO Preferred 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 PIMCO Preferred will offset losses from the drop in PIMCO Preferred'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 |
| PIMCO Preferred vs. ETF Series Solutions | PIMCO Preferred vs. Aquagold International | PIMCO Preferred vs. Morningstar Unconstrained Allocation | PIMCO Preferred vs. High Yield Municipal 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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