Correlation Between Walmart and Bar Harbor
Can any of the company-specific risk be diversified away by investing in both Walmart and Bar Harbor 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 Walmart and Bar Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Bar Harbor Bankshares, you can compare the effects of market volatilities on Walmart and Bar Harbor 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 Walmart with a short position of Bar Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Bar Harbor.
Diversification Opportunities for Walmart and Bar Harbor
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Bar is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Bar Harbor Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bar Harbor Bankshares and Walmart 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 Walmart are associated (or correlated) with Bar Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bar Harbor Bankshares has no effect on the direction of Walmart i.e., Walmart and Bar Harbor go up and down completely randomly.
Pair Corralation between Walmart and Bar Harbor
Considering the 90-day investment horizon Walmart is expected to generate 0.43 times more return on investment than Bar Harbor. However, Walmart is 2.32 times less risky than Bar Harbor. It trades about 0.09 of its potential returns per unit of risk. Bar Harbor Bankshares is currently generating about 0.02 per unit of risk. If you would invest 4,885 in Walmart on December 29, 2023 and sell it today you would earn a total of 1,154 from holding Walmart or generate 23.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 99.6% |
Values | Daily Returns |
Walmart vs. Bar Harbor Bankshares
Performance |
Timeline |
Walmart |
Bar Harbor Bankshares |
Walmart and Bar Harbor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walmart and Bar Harbor
The main advantage of trading using opposite Walmart and Bar Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Bar Harbor 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 Bar Harbor will offset losses from the drop in Bar Harbor's long position.Walmart vs. Asure Software | Walmart vs. Cabo Drilling Corp | Walmart vs. Transocean | Walmart vs. AKITA Drilling |
Bar Harbor vs. Merchants Bancorp | Bar Harbor vs. Axos Financial | Bar Harbor vs. Regions Financial | Bar Harbor vs. Regions Financial |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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