Correlation Between Walker Dunlop and Xiamen Amoytop

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

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

Diversification Opportunities for Walker Dunlop and Xiamen Amoytop

0.47

Correlation Coefficient

Walker Dunlop  Xiamen Amoytop

Very weak diversification

The 3 months correlation between Walker and Xiamen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Xiamen Amoytop Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Amoytop Biotech 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 Xiamen Amoytop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Amoytop Biotech has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Xiamen Amoytop go up and down completely randomly.

Pair Corralation between Walker Dunlop and Xiamen Amoytop

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Xiamen Amoytop. In addition to that, Walker Dunlop is 1.11 times more volatile than Xiamen Amoytop Biotech. It trades about -0.32 of its total potential returns per unit of risk. Xiamen Amoytop Biotech is currently generating about 0.13 per unit of volatility. If you would invest  7,030  in Xiamen Amoytop Biotech on October 8, 2024 and sell it today you would earn a total of  321.00  from holding Xiamen Amoytop Biotech or generate 4.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Walker Dunlop  vs.  Xiamen Amoytop Biotech

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 weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Xiamen Amoytop Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xiamen Amoytop Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Walker Dunlop and Xiamen Amoytop

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

The idea behind Walker Dunlop and Xiamen Amoytop Biotech 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.