Correlation Between Walker Dunlop and Fundo Investimento

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

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

Diversification Opportunities for Walker Dunlop and Fundo Investimento

-0.23

Correlation Coefficient

Walker Dunlop  Fundo Investimento

Very good diversification

The 3 months correlation between Walker and Fundo is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Fundo Investimento Imobiliario in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundo Investimento 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 Fundo Investimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundo Investimento has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Fundo Investimento go up and down completely randomly.

Pair Corralation between Walker Dunlop and Fundo Investimento

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.47 times more return on investment than Fundo Investimento. However, Walker Dunlop is 2.47 times more volatile than Fundo Investimento Imobiliario. It trades about 0.04 of its potential returns per unit of risk. Fundo Investimento Imobiliario is currently generating about -0.12 per unit of risk. If you would invest  10,571  in Walker Dunlop on September 4, 2024 and sell it today you would earn a total of  345.00  from holding Walker Dunlop or generate 3.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Walker Dunlop  vs.  Fundo Investimento Imobiliario

Walker Dunlop

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 3 (%) 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.

Fundo Investimento

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fundo Investimento Imobiliario has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong essential indicators, Fundo Investimento is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walker Dunlop and Fundo Investimento

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

The idea behind Walker Dunlop and Fundo Investimento Imobiliario 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.