Correlation Between PERSIMMON PLC and Walmart
Can any of the company-specific risk be diversified away by investing in both PERSIMMON PLC 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 PERSIMMON PLC and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PERSIMMON PLC and Walmart, you can compare the effects of market volatilities on PERSIMMON PLC 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 PERSIMMON PLC with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of PERSIMMON PLC and Walmart.
Diversification Opportunities for PERSIMMON PLC and Walmart
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PERSIMMON and Walmart is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding PERSIMMON PLC and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and PERSIMMON PLC 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 PERSIMMON PLC 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 PERSIMMON PLC i.e., PERSIMMON PLC and Walmart go up and down completely randomly.
Pair Corralation between PERSIMMON PLC and Walmart
Assuming the 90 days trading horizon PERSIMMON PLC is expected to under-perform the Walmart. In addition to that, PERSIMMON PLC is 2.08 times more volatile than Walmart. It trades about -0.11 of its total potential returns per unit of risk. Walmart is currently generating about 0.2 per unit of volatility. If you would invest 5,003 in Walmart on January 26, 2024 and sell it today you would earn a total of 580.00 from holding Walmart or generate 11.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
PERSIMMON PLC vs. Walmart
Performance |
Timeline |
PERSIMMON PLC |
Walmart |
PERSIMMON PLC and Walmart Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PERSIMMON PLC and Walmart
The main advantage of trading using opposite PERSIMMON PLC and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PERSIMMON PLC 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.PERSIMMON PLC vs. RELIANCE STEEL AL | PERSIMMON PLC vs. BLUESCOPE STEEL | PERSIMMON PLC vs. MINCO SILVER | PERSIMMON PLC vs. Harmony Gold Mining |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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