Correlation Between Walker Dunlop and VanEck Inflation

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

By analyzing existing cross correlation between Walker Dunlop and VanEck Inflation Allocation, you can compare the effects of market volatilities on Walker Dunlop and VanEck Inflation 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 VanEck Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and VanEck Inflation.

Diversification Opportunities for Walker Dunlop and VanEck Inflation

0.59

Correlation Coefficient

Walker Dunlop  VanEck Inflation

Very weak diversification

The 3 months correlation between Walker and VanEck is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and VanEck Inflation Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Inflation All 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 VanEck Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Inflation All has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and VanEck Inflation go up and down completely randomly.

Pair Corralation between Walker Dunlop and VanEck Inflation

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.34 times less return on investment than VanEck Inflation. In addition to that, Walker Dunlop is 2.56 times more volatile than VanEck Inflation Allocation. It trades about 0.06 of its total potential returns per unit of risk. VanEck Inflation Allocation is currently generating about 0.21 per unit of volatility. If you would invest  2,782  in VanEck Inflation Allocation on September 2, 2024 and sell it today you would earn a total of  239.00  from holding VanEck Inflation Allocation or generate 8.59% return on investment over 90 days.

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

Walker Dunlop  vs.  VanEck Inflation Allocation

Walker Dunlop

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Walker Dunlop is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

VanEck Inflation All

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Inflation Allocation are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, VanEck Inflation may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Walker Dunlop and VanEck Inflation

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

The idea behind Walker Dunlop and VanEck Inflation Allocation 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.