Correlation Between Investor and Walmart
Can any of the company-specific risk be diversified away by investing in both Investor 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 Investor and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investor AB and Walmart, you can compare the effects of market volatilities on Investor 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 Investor with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investor and Walmart.
Diversification Opportunities for Investor and Walmart
Pay attention - limited upside
The 3 months correlation between Investor and Walmart is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Investor AB and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Investor 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 Investor AB 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 Investor i.e., Investor and Walmart go up and down completely randomly.
Pair Corralation between Investor and Walmart
If you would invest 4,988 in Walmart on January 17, 2024 and sell it today you would earn a total of 1,005 from holding Walmart or generate 20.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Investor AB vs. Walmart
Performance |
| Timeline |
| Investor AB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Walmart |
Investor and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investor and Walmart
The main advantage of trading using opposite Investor and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investor 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.| Investor vs. DataDot Technology Limited | Investor vs. Griffon | Investor vs. Cementos Pacasmayo SAA | Investor vs. Skyline |
| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Big Lots |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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