Correlation Between Walker Dunlop and Opko Health

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Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Opko Health 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 Opko Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Opko Health, you can compare the effects of market volatilities on Walker Dunlop and Opko Health 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 Opko Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Opko Health.

Diversification Opportunities for Walker Dunlop and Opko Health

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Walker and Opko is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Opko Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opko Health 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 Opko Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opko Health has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Opko Health go up and down completely randomly.

Pair Corralation between Walker Dunlop and Opko Health

Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Opko Health. In addition to that, Walker Dunlop is 1.31 times more volatile than Opko Health. It trades about -0.28 of its total potential returns per unit of risk. Opko Health is currently generating about -0.23 per unit of volatility. If you would invest  158.00  in Opko Health on October 8, 2024 and sell it today you would lose (10.00) from holding Opko Health or give up 6.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.0%
ValuesDaily Returns

Walker Dunlop  vs.  Opko Health

 Performance 
       Timeline  
Walker Dunlop 

Risk-Adjusted Performance

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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.
Opko Health 

Risk-Adjusted Performance

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Weak
 
Strong
Weak
Over the last 90 days Opko Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Opko Health is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Walker Dunlop and Opko Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walker Dunlop and Opko Health

The main advantage of trading using opposite Walker Dunlop and Opko Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Opko Health 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 Opko Health will offset losses from the drop in Opko Health's long position.
The idea behind Walker Dunlop and Opko Health 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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