Correlation Between Walker Dunlop and ProShares Inflation

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

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

Diversification Opportunities for Walker Dunlop and ProShares Inflation

-0.2

Correlation Coefficient

Walker Dunlop  ProShares Inflation

Good diversification

The 3 months correlation between Walker and ProShares is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and ProShares Inflation Expectatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Inflation 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 ProShares Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Inflation has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and ProShares Inflation go up and down completely randomly.

Pair Corralation between Walker Dunlop and ProShares Inflation

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.03 times less return on investment than ProShares Inflation. In addition to that, Walker Dunlop is 5.96 times more volatile than ProShares Inflation Expectations. It trades about 0.02 of its total potential returns per unit of risk. ProShares Inflation Expectations is currently generating about 0.11 per unit of volatility. If you would invest  3,216  in ProShares Inflation Expectations on April 25, 2025 and sell it today you would earn a total of  82.00  from holding ProShares Inflation Expectations or generate 2.55% return on investment over 90 days.

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

Walker Dunlop  vs.  ProShares Inflation Expectatio

Walker Dunlop

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 1 (%) 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.

ProShares Inflation

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Inflation Expectations are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ProShares Inflation is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Walker Dunlop and ProShares Inflation

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

The idea behind Walker Dunlop and ProShares Inflation Expectations 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.