Correlation Between Walker Dunlop and Moderate Strategy

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

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

Diversification Opportunities for Walker Dunlop and Moderate Strategy

0.08

Correlation Coefficient

Walker Dunlop  Moderate Strategy

Significant diversification

The 3 months correlation between Walker and Moderate is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Moderate Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderate Strategy 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 Moderate Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderate Strategy has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Moderate Strategy go up and down completely randomly.

Pair Corralation between Walker Dunlop and Moderate Strategy

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.81 times less return on investment than Moderate Strategy. In addition to that, Walker Dunlop is 6.44 times more volatile than Moderate Strategy Fund. It trades about 0.01 of its total potential returns per unit of risk. Moderate Strategy Fund is currently generating about 0.27 per unit of volatility. If you would invest  936.00  in Moderate Strategy Fund on April 28, 2025 and sell it today you would earn a total of  55.00  from holding Moderate Strategy Fund or generate 5.88% return on investment over 90 days.

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

Walker Dunlop  vs.  Moderate Strategy Fund

Walker Dunlop

Risk-Adjusted Performance

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.

Moderate Strategy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Moderate Strategy Fund are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Moderate Strategy 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 Moderate Strategy

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

The idea behind Walker Dunlop and Moderate Strategy Fund 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.