Correlation Between Walker Dunlop and AIICO INSURANCE

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

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

Diversification Opportunities for Walker Dunlop and AIICO INSURANCE

0.27

Correlation Coefficient

Walker Dunlop  AIICO INSURANCE

Modest diversification

The 3 months correlation between Walker and AIICO is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and AIICO INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIICO INSURANCE PLC 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 AIICO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIICO INSURANCE PLC has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and AIICO INSURANCE go up and down completely randomly.

Pair Corralation between Walker Dunlop and AIICO INSURANCE

Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 105.32 times less return on investment than AIICO INSURANCE. But when comparing it to its historical volatility, Walker Dunlop is 1.49 times less risky than AIICO INSURANCE. It trades about 0.0 of its potential returns per unit of risk. AIICO INSURANCE PLC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  164.00  in AIICO INSURANCE PLC on April 22, 2025 and sell it today you would earn a total of  47.00  from holding AIICO INSURANCE PLC or generate 28.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Walker Dunlop  vs.  AIICO INSURANCE PLC

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 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.

AIICO INSURANCE PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AIICO INSURANCE PLC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, AIICO INSURANCE showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walker Dunlop and AIICO INSURANCE

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

The idea behind Walker Dunlop and AIICO INSURANCE PLC 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.