Correlation Between Guild Holdings and Walker Dunlop

Can any of the company-specific risk be diversified away by investing in both Guild Holdings and Walker Dunlop 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 Guild Holdings and Walker Dunlop into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guild Holdings Co and Walker Dunlop, you can compare the effects of market volatilities on Guild Holdings and Walker Dunlop 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 Guild Holdings with a short position of Walker Dunlop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guild Holdings and Walker Dunlop.

Diversification Opportunities for Guild Holdings and Walker Dunlop

-0.08

Correlation Coefficient

Guild Holdings  Walker Dunlop

Good diversification

The 3 months correlation between Guild and Walker is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Guild Holdings Co and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop and Guild Holdings 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 Guild Holdings Co are associated (or correlated) with Walker Dunlop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walker Dunlop has no effect on the direction of Guild Holdings i.e., Guild Holdings and Walker Dunlop go up and down completely randomly.

Pair Corralation between Guild Holdings and Walker Dunlop

Given the investment horizon of 90 days Guild Holdings Co is expected to under-perform the Walker Dunlop. In addition to that, Guild Holdings is 1.11 times more volatile than Walker Dunlop. It trades about -0.15 of its total potential returns per unit of risk. Walker Dunlop is currently generating about 0.07 per unit of volatility. If you would invest  10,435  in Walker Dunlop on August 31, 2024 and sell it today you would earn a total of  647.00  from holding Walker Dunlop or generate 6.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Guild Holdings Co  vs.  Walker Dunlop

Guild Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guild Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Walker Dunlop

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Walker Dunlop may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Guild Holdings and Walker Dunlop

The main advantage of trading using opposite Guild Holdings and Walker Dunlop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guild Holdings position performs unexpectedly, Walker Dunlop 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 Walker Dunlop will offset losses from the drop in Walker Dunlop's long position.

The idea behind Guild Holdings Co and Walker Dunlop 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..