Correlation Between Fonar and Walmart
Can any of the company-specific risk be diversified away by investing in both Fonar 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 Fonar and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fonar and Walmart, you can compare the effects of market volatilities on Fonar 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 Fonar with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fonar and Walmart.
Diversification Opportunities for Fonar and Walmart
Average diversification
The 3 months correlation between Fonar and Walmart is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Fonar and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Fonar 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 Fonar 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 Fonar i.e., Fonar and Walmart go up and down completely randomly.
Pair Corralation between Fonar and Walmart
Given the investment horizon of 90 days Fonar is expected to under-perform the Walmart. In addition to that, Fonar is 2.5 times more volatile than Walmart. It trades about -0.68 of its total potential returns per unit of risk. Walmart is currently generating about -0.06 per unit of volatility. If you would invest 6,051 in Walmart on January 26, 2024 and sell it today you would lose (64.00) from holding Walmart or give up 1.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Fonar vs. Walmart
Performance |
Timeline |
Fonar |
Walmart |
Fonar and Walmart Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fonar and Walmart
The main advantage of trading using opposite Fonar and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fonar 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.Fonar vs. Burning Rock BiotechLtd | Fonar vs. Sera Prognostics | Fonar vs. BiodesixInc | Fonar vs. Enzo Biochem |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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