Correlation Between Walker Dunlop and Aekyung Industrial

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

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

Diversification Opportunities for Walker Dunlop and Aekyung Industrial

0.14

Correlation Coefficient

Walker Dunlop  Aekyung Industrial

Average diversification

The 3 months correlation between Walker and Aekyung is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Aekyung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aekyung Industrial 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 Aekyung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aekyung Industrial has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Aekyung Industrial go up and down completely randomly.

Pair Corralation between Walker Dunlop and Aekyung Industrial

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.8 times more return on investment than Aekyung Industrial. However, Walker Dunlop is 1.25 times less risky than Aekyung Industrial. It trades about 0.04 of its potential returns per unit of risk. Aekyung Industrial Co is currently generating about -0.01 per unit of risk. If you would invest  7,967  in Walker Dunlop on September 3, 2024 and sell it today you would earn a total of  3,051  from holding Walker Dunlop or generate 38.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.58%
Values	Daily Returns

Walker Dunlop  vs.  Aekyung Industrial Co

Walker Dunlop

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walker Dunlop are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Walker Dunlop is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Aekyung Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aekyung Industrial Co 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 somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Walker Dunlop and Aekyung Industrial

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

The idea behind Walker Dunlop and Aekyung Industrial Co 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.