Correlation Between Walker Dunlop and MicroSectors FANG

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

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

Diversification Opportunities for Walker Dunlop and MicroSectors FANG

-0.33

Correlation Coefficient

Walker Dunlop  MicroSectors FANG

Very good diversification

The 3 months correlation between Walker and MicroSectors is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and MicroSectors FANG Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors FANG Index 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 MicroSectors FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors FANG Index has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and MicroSectors FANG go up and down completely randomly.

Pair Corralation between Walker Dunlop and MicroSectors FANG

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.72 times more return on investment than MicroSectors FANG. However, Walker Dunlop is 1.39 times less risky than MicroSectors FANG. It trades about 0.04 of its potential returns per unit of risk. MicroSectors FANG Index is currently generating about -0.28 per unit of risk. If you would invest  7,191  in Walker Dunlop on May 3, 2025 and sell it today you would earn a total of  310.00  from holding Walker Dunlop or generate 4.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Walker Dunlop  vs.  MicroSectors FANG Index

Walker Dunlop

Risk-Adjusted Performance

Weak

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

MicroSectors FANG Index

Risk-Adjusted Performance

Very Weak

Over the last 90 days MicroSectors FANG Index has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's technical and fundamental indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Pair Trading with Walker Dunlop and MicroSectors FANG

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

The idea behind Walker Dunlop and MicroSectors FANG Index 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.