Correlation Between Walker Dunlop and ASM International

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

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

Diversification Opportunities for Walker Dunlop and ASM International

-0.6

Correlation Coefficient

Walker Dunlop  ASM International

Excellent diversification

The 3 months correlation between Walker and ASM is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and ASM International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM International 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 ASM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM International has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and ASM International go up and down completely randomly.

Pair Corralation between Walker Dunlop and ASM International

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the ASM International. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 1.37 times less risky than ASM International. The stock trades about -0.11 of its potential returns per unit of risk. The ASM International NV is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  56,260  in ASM International NV on December 2, 2024 and sell it today you would lose (5,260) from holding ASM International NV or give up 9.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.02%
Values	Daily Returns

Walker Dunlop  vs.  ASM International NV

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

ASM International

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASM International NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ASM International is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Walker Dunlop and ASM International

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

The idea behind Walker Dunlop and ASM International NV 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.