Correlation Between Walker Dunlop and US Treasury

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

By analyzing existing cross correlation between Walker Dunlop and US Treasury 12, you can compare the effects of market volatilities on Walker Dunlop and US Treasury 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 US Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and US Treasury.

Diversification Opportunities for Walker Dunlop and US Treasury

-0.82

Correlation Coefficient

Walker Dunlop  US Treasury

Pay attention - limited upside

The 3 months correlation between Walker and OBIL is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and US Treasury 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Treasury 12 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 US Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Treasury 12 has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and US Treasury go up and down completely randomly.

Pair Corralation between Walker Dunlop and US Treasury

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the US Treasury. In addition to that, Walker Dunlop is 45.93 times more volatile than US Treasury 12. It trades about -0.03 of its total potential returns per unit of risk. US Treasury 12 is currently generating about 0.44 per unit of volatility. If you would invest  4,772  in US Treasury 12 on February 18, 2025 and sell it today you would earn a total of  235.00  from holding US Treasury 12 or generate 4.92% return on investment over 90 days.

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

Walker Dunlop  vs.  US Treasury 12

Walker Dunlop

Risk-Adjusted Performance

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 unsteady 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.

US Treasury 12

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in US Treasury 12 are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, US Treasury is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Walker Dunlop and US Treasury

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

The idea behind Walker Dunlop and US Treasury 12 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.