Correlation Between Walker Dunlop and Clearbridge Large

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

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

Diversification Opportunities for Walker Dunlop and Clearbridge Large

0.04

Correlation Coefficient

Walker Dunlop  Clearbridge Large

Significant diversification

The 3 months correlation between Walker and Clearbridge is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Clearbridge Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Large Cap 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 Clearbridge Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Large Cap has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Clearbridge Large go up and down completely randomly.

Pair Corralation between Walker Dunlop and Clearbridge Large

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 3.19 times less return on investment than Clearbridge Large. In addition to that, Walker Dunlop is 2.43 times more volatile than Clearbridge Large Cap. It trades about 0.03 of its total potential returns per unit of risk. Clearbridge Large Cap is currently generating about 0.26 per unit of volatility. If you would invest  3,523  in Clearbridge Large Cap on May 1, 2025 and sell it today you would earn a total of  520.00  from holding Clearbridge Large Cap or generate 14.76% 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.  Clearbridge Large Cap

Walker Dunlop

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 2 (%) 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.

Clearbridge Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge Large Cap are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Clearbridge Large showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walker Dunlop and Clearbridge Large

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

The idea behind Walker Dunlop and Clearbridge Large Cap 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.