Correlation Between Associated Capital and Walker Dunlop

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

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

Diversification Opportunities for Associated Capital and Walker Dunlop

-0.3

Correlation Coefficient

Associated Capital  Walker Dunlop

Very good diversification

The 3 months correlation between Associated and Walker is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop and Associated Capital 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 Associated Capital Group 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 Associated Capital i.e., Associated Capital and Walker Dunlop go up and down completely randomly.

Pair Corralation between Associated Capital and Walker Dunlop

Allowing for the 90-day total investment horizon Associated Capital is expected to generate 3.2 times less return on investment than Walker Dunlop. But when comparing it to its historical volatility, Associated Capital Group is 1.77 times less risky than Walker Dunlop. It trades about 0.01 of its potential returns per unit of risk. Walker Dunlop is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7,351  in Walker Dunlop on May 2, 2025 and sell it today you would earn a total of  150.00  from holding Walker Dunlop or generate 2.04% return on investment over 90 days.

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

Associated Capital Group  vs.  Walker Dunlop

Associated Capital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Capital Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Associated Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Walker Dunlop

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 2 (%) 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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Associated Capital and Walker Dunlop

The main advantage of trading using opposite Associated Capital and Walker Dunlop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital 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 Associated Capital Group 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.