Correlation Between Walker Dunlop and Ab Small

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Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Ab Small 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 Ab Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Ab Small Cap, you can compare the effects of market volatilities on Walker Dunlop and Ab Small 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 Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Ab Small.

Diversification Opportunities for Walker Dunlop and Ab Small

WalkerQUAZXDiversified AwayWalkerQUAZXDiversified Away100%
0.68
  Correlation Coefficient

Poor diversification

The 3 months correlation between Walker and QUAZX is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap 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 Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Ab Small go up and down completely randomly.

Pair Corralation between Walker Dunlop and Ab Small

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Ab Small. In addition to that, Walker Dunlop is 1.37 times more volatile than Ab Small Cap. It trades about -0.42 of its total potential returns per unit of risk. Ab Small Cap is currently generating about -0.31 per unit of volatility. If you would invest  7,639  in Ab Small Cap on November 27, 2024 and sell it today you would lose (589.00) from holding Ab Small Cap or give up 7.71% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Walker Dunlop  vs.  Ab Small Cap

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-505
JavaScript chart by amCharts 3.21.15WD QUAZX
       Timeline  
Walker Dunlop 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Walker Dunlop has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb859095100105110115
Ab Small Cap 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ab Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb7274767880

Walker Dunlop and Ab Small Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.44-2.57-1.71-0.85-0.0120.71.412.132.853.57 0.050.100.150.20
JavaScript chart by amCharts 3.21.15WD QUAZX
       Returns  

Pair Trading with Walker Dunlop and Ab Small

The main advantage of trading using opposite Walker Dunlop and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Ab Small 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 Ab Small will offset losses from the drop in Ab Small's long position.
The idea behind Walker Dunlop and Ab Small Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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