Correlation Between GOODTECH ASA and Walker Dunlop

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

By analyzing existing cross correlation between GOODTECH ASA A and Walker Dunlop, you can compare the effects of market volatilities on GOODTECH ASA and Walker Dunlop 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 GOODTECH ASA with a short position of Walker Dunlop. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOODTECH ASA and Walker Dunlop.

Diversification Opportunities for GOODTECH ASA and Walker Dunlop

-0.37

Correlation Coefficient

GOODTECH ASA  Walker Dunlop

Very good diversification

The 3 months correlation between GOODTECH and Walker is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding GOODTECH ASA A and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop and GOODTECH ASA 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 GOODTECH ASA A are associated (or correlated) with Walker Dunlop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walker Dunlop has no effect on the direction of GOODTECH ASA i.e., GOODTECH ASA and Walker Dunlop go up and down completely randomly.

Pair Corralation between GOODTECH ASA and Walker Dunlop

Assuming the 90 days horizon GOODTECH ASA A is expected to under-perform the Walker Dunlop. In addition to that, GOODTECH ASA is 1.03 times more volatile than Walker Dunlop. It trades about -0.16 of its total potential returns per unit of risk. Walker Dunlop is currently generating about 0.08 per unit of volatility. If you would invest  9,487  in Walker Dunlop on September 3, 2024 and sell it today you would earn a total of  813.00  from holding Walker Dunlop or generate 8.57% return on investment over 90 days.

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

GOODTECH ASA A  vs.  Walker Dunlop

GOODTECH ASA A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GOODTECH ASA A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Walker Dunlop

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Walker Dunlop may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GOODTECH ASA and Walker Dunlop

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

The idea behind GOODTECH ASA A and Walker Dunlop 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .