Correlation Between Walker Dunlop and TLT
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and TLT 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 TLT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and TLT, you can compare the effects of market volatilities on Walker Dunlop and TLT 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 TLT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and TLT.
Diversification Opportunities for Walker Dunlop and TLT
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walker and TLT is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and TLT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TLT 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 TLT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TLT has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and TLT go up and down completely randomly.
Pair Corralation between Walker Dunlop and TLT
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.18 times more return on investment than TLT. However, Walker Dunlop is 5.6 times less risky than TLT. It trades about -0.09 of its potential returns per unit of risk. TLT is currently generating about -0.14 per unit of risk. If you would invest 11,155 in Walker Dunlop on August 26, 2024 and sell it today you would lose (306.00) from holding Walker Dunlop or give up 2.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Walker Dunlop vs. TLT
Performance |
| Timeline |
| Walker Dunlop |
| TLT |
Walker Dunlop and TLT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and TLT
The main advantage of trading using opposite Walker Dunlop and TLT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, TLT 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 TLT will offset losses from the drop in TLT'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 |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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