Correlation Between Technicolor and Walmart
Can any of the company-specific risk be diversified away by investing in both Technicolor 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 Technicolor and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technicolor and Walmart, you can compare the effects of market volatilities on Technicolor 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 Technicolor with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technicolor and Walmart.
Diversification Opportunities for Technicolor and Walmart
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Technicolor and Walmart is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Technicolor and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Technicolor 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 Technicolor 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 Technicolor i.e., Technicolor and Walmart go up and down completely randomly.
Pair Corralation between Technicolor and Walmart
Assuming the 90 days trading horizon Technicolor is expected to generate 83.94 times more return on investment than Walmart. However, Technicolor is 83.94 times more volatile than Walmart. It trades about 0.04 of its potential returns per unit of risk. Walmart is currently generating about 0.13 per unit of risk. If you would invest 11.00 in Technicolor on October 25, 2024 and sell it today you would earn a total of 1.00 from holding Technicolor or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Technicolor vs. Walmart
Performance |
| Timeline |
| Technicolor |
| Walmart |
Technicolor and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technicolor and Walmart
The main advantage of trading using opposite Technicolor and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technicolor 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.| Technicolor vs. Mobius Investment Trust | Technicolor vs. SoftBank Group Corp | Technicolor vs. Livermore Investments Group | Technicolor vs. Commerzbank AG |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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