Correlation Between Walker Dunlop and Amogreentech CoLtd
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Amogreentech CoLtd 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 Amogreentech CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Amogreentech CoLtd, you can compare the effects of market volatilities on Walker Dunlop and Amogreentech CoLtd 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 Amogreentech CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Amogreentech CoLtd.
Diversification Opportunities for Walker Dunlop and Amogreentech CoLtd
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walker and Amogreentech is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Amogreentech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amogreentech CoLtd 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 Amogreentech CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amogreentech CoLtd has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Amogreentech CoLtd go up and down completely randomly.
Pair Corralation between Walker Dunlop and Amogreentech CoLtd
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.42 times more return on investment than Amogreentech CoLtd. However, Walker Dunlop is 2.36 times less risky than Amogreentech CoLtd. It trades about -0.01 of its potential returns per unit of risk. Amogreentech CoLtd is currently generating about -0.11 per unit of risk. If you would invest 11,120 in Walker Dunlop on August 29, 2024 and sell it today you would lose (64.00) from holding Walker Dunlop or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Amogreentech CoLtd
Performance |
| Timeline |
| Walker Dunlop |
| Amogreentech CoLtd |
Walker Dunlop and Amogreentech CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Amogreentech CoLtd
The main advantage of trading using opposite Walker Dunlop and Amogreentech CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Amogreentech CoLtd 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 Amogreentech CoLtd will offset losses from the drop in Amogreentech CoLtd's long position.| Walker Dunlop vs. Mr Cooper Group | Walker Dunlop vs. Velocity Financial Llc | Walker Dunlop vs. Security National Financial | Walker Dunlop vs. Encore Capital Group |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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