Correlation Between Walker Dunlop and Ab Global

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

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

Diversification Opportunities for Walker Dunlop and Ab Global

0.63

Correlation Coefficient

Walker Dunlop  Ab Global

Poor diversification

The 3 months correlation between Walker and GCEAX is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Ab Global E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global E 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 Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global E has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Ab Global go up and down completely randomly.

Pair Corralation between Walker Dunlop and Ab Global

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.76 times more return on investment than Ab Global. However, Walker Dunlop is 2.76 times more volatile than Ab Global E. It trades about 0.09 of its potential returns per unit of risk. Ab Global E is currently generating about 0.18 per unit of risk. If you would invest  9,312  in Walker Dunlop on February 19, 2024 and sell it today you would earn a total of  928.00  from holding Walker Dunlop or generate 9.97% return on investment over 90 days.

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

Walker Dunlop  vs.  Ab Global E

Walker Dunlop

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Walker Dunlop may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Ab Global E

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Global E are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ab Global may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Walker Dunlop and Ab Global

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

The idea behind Walker Dunlop and Ab Global E 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.