Correlation Between Walker Dunlop and Calvert Smallcap

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

By analyzing existing cross correlation between Walker Dunlop and Calvert Smallcap Fund6, you can compare the effects of market volatilities on Walker Dunlop and Calvert Smallcap 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 Calvert Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Calvert Smallcap.

Diversification Opportunities for Walker Dunlop and Calvert Smallcap

0.47

Correlation Coefficient

Walker Dunlop  Calvert Smallcap

Very weak diversification

The 3 months correlation between Walker and Calvert is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Calvert Smallcap Fund6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Smallcap Fund6 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 Calvert Smallcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Smallcap Fund6 has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Calvert Smallcap go up and down completely randomly.

Pair Corralation between Walker Dunlop and Calvert Smallcap

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.01 times more return on investment than Calvert Smallcap. However, Walker Dunlop is 2.01 times more volatile than Calvert Smallcap Fund6. It trades about 0.19 of its potential returns per unit of risk. Calvert Smallcap Fund6 is currently generating about 0.07 per unit of risk. If you would invest  6,834  in Walker Dunlop on May 27, 2025 and sell it today you would earn a total of  1,848  from holding Walker Dunlop or generate 27.04% 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.  Calvert Smallcap Fund6

Walker Dunlop

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Walker Dunlop exhibited solid returns over the last few months and may actually be approaching a breakup point.

Calvert Smallcap Fund6

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Smallcap Fund6 are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calvert Smallcap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walker Dunlop and Calvert Smallcap

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

The idea behind Walker Dunlop and Calvert Smallcap Fund6 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.