Correlation Between Walmart and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both Walmart and Grieg Seafood 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 Grieg Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Grieg Seafood, you can compare the effects of market volatilities on Walmart and Grieg Seafood 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 Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Grieg Seafood.
Diversification Opportunities for Walmart and Grieg Seafood
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and Grieg is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Grieg Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood 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 Grieg Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grieg Seafood has no effect on the direction of Walmart i.e., Walmart and Grieg Seafood go up and down completely randomly.
Pair Corralation between Walmart and Grieg Seafood
Assuming the 90 days trading horizon Walmart is expected to generate 7.26 times more return on investment than Grieg Seafood. However, Walmart is 7.26 times more volatile than Grieg Seafood. It trades about 0.05 of its potential returns per unit of risk. Grieg Seafood is currently generating about -0.01 per unit of risk. If you would invest 4,328 in Walmart on October 13, 2024 and sell it today you would earn a total of 1,632 from holding Walmart or generate 37.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Walmart vs. Grieg Seafood
Performance |
| Timeline |
| Walmart |
| Grieg Seafood |
Walmart and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Grieg Seafood
The main advantage of trading using opposite Walmart and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Grieg Seafood 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 Grieg Seafood will offset losses from the drop in Grieg Seafood's long position.| Walmart vs. Micron Technology | Walmart vs. Check Point Software | Walmart vs. International Biotechnology Trust | Walmart vs. SMA Solar Technology |
| Grieg Seafood vs. Walmart | Grieg Seafood vs. BYD Co | Grieg Seafood vs. Volkswagen AG | Grieg Seafood vs. Volkswagen AG Non Vtg |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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