Correlation Between Walker Dunlop and IShares Environmental

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

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

Diversification Opportunities for Walker Dunlop and IShares Environmental

0.32

Correlation Coefficient

Walker Dunlop  IShares Environmental

Weak diversification

The 3 months correlation between Walker and IShares is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and iShares Environmental Infrastr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Environmental 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 IShares Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Environmental has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and IShares Environmental go up and down completely randomly.

Pair Corralation between Walker Dunlop and IShares Environmental

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 3.18 times more return on investment than IShares Environmental. However, Walker Dunlop is 3.18 times more volatile than iShares Environmental Infrastructure. It trades about 0.05 of its potential returns per unit of risk. iShares Environmental Infrastructure is currently generating about 0.12 per unit of risk. If you would invest  7,087  in Walker Dunlop on May 6, 2025 and sell it today you would earn a total of  359.00  from holding Walker Dunlop or generate 5.07% return on investment over 90 days.

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

Walker Dunlop  vs.  iShares Environmental Infrastr

Walker Dunlop

Risk-Adjusted Performance

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 fragile fundamental indicators, Walker Dunlop may actually be approaching a critical reversion point that can send shares even higher in September 2025.

iShares Environmental

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Environmental Infrastructure are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, IShares Environmental is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walker Dunlop and IShares Environmental

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

The idea behind Walker Dunlop and iShares Environmental Infrastructure 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.