Correlation Between Freds and Walmart
Can any of the company-specific risk be diversified away by investing in both Freds and Walmart 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 Freds and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freds Inc and Walmart, you can compare the effects of market volatilities on Freds and Walmart 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 Freds with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freds and Walmart.
Diversification Opportunities for Freds and Walmart
Pay attention - limited upside
The 3 months correlation between Freds and Walmart is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Freds Inc and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Freds 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 Freds Inc are associated (or correlated) with Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Freds i.e., Freds and Walmart go up and down completely randomly.
Pair Corralation between Freds and Walmart
If you would invest 4,915 in Walmart on January 20, 2024 and sell it today you would earn a total of 1,038 from holding Walmart or generate 21.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Freds Inc vs. Walmart
Performance |
| Timeline |
| Freds Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Walmart |
Freds and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freds and Walmart
The main advantage of trading using opposite Freds and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freds position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.| Freds vs. Skechers USA | Freds vs. Eastern Co | Freds vs. Steven Madden | Freds vs. RBC Bearings Incorporated |
| Walmart vs. Aquagold International | Walmart vs. Morningstar Unconstrained Allocation | Walmart vs. Thrivent High Yield | Walmart vs. Via Renewables |
Check out your portfolio center.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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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