Correlation Between Walker Dunlop and Goldman Sachs

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

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

Diversification Opportunities for Walker Dunlop and Goldman Sachs

0.12

Correlation Coefficient

Walker Dunlop  Goldman Sachs

Average diversification

The 3 months correlation between Walker and Goldman is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Goldman Sachs Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Strategic 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Strategic has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Goldman Sachs go up and down completely randomly.

Pair Corralation between Walker Dunlop and Goldman Sachs

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 12.18 times more return on investment than Goldman Sachs. However, Walker Dunlop is 12.18 times more volatile than Goldman Sachs Strategic. It trades about 0.03 of its potential returns per unit of risk. Goldman Sachs Strategic is currently generating about -0.1 per unit of risk. If you would invest  9,007  in Walker Dunlop on January 19, 2024 and sell it today you would earn a total of  84.00  from holding Walker Dunlop or generate 0.93% 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.  Goldman Sachs Strategic

Walker Dunlop

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Walker Dunlop has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Goldman Sachs Strategic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Strategic has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Goldman Sachs 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 Goldman Sachs

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

The idea behind Walker Dunlop and Goldman Sachs Strategic 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.