Correlation Between Walmart and Ion Beam
Can any of the company-specific risk be diversified away by investing in both Walmart and Ion Beam 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 Ion Beam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Ion Beam Applications, you can compare the effects of market volatilities on Walmart and Ion Beam 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 Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Ion Beam.
Diversification Opportunities for Walmart and Ion Beam
Very good diversification
The 3 months correlation between Walmart and Ion is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Ion Beam Applications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ion Beam Applications 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 Ion Beam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ion Beam Applications has no effect on the direction of Walmart i.e., Walmart and Ion Beam go up and down completely randomly.
Pair Corralation between Walmart and Ion Beam
Assuming the 90 days trading horizon Walmart is expected to generate 0.03 times more return on investment than Ion Beam. However, Walmart is 33.37 times less risky than Ion Beam. It trades about 0.16 of its potential returns per unit of risk. Ion Beam Applications is currently generating about -0.01 per unit of risk. If you would invest 5,939 in Walmart on October 11, 2024 and sell it today you would earn a total of 21.00 from holding Walmart or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
Walmart vs. Ion Beam Applications
Performance |
| Timeline |
| Walmart |
| Ion Beam Applications |
Walmart and Ion Beam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Ion Beam
The main advantage of trading using opposite Walmart and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Ion Beam 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 Ion Beam will offset losses from the drop in Ion Beam's long position.| Walmart vs. Worldwide Healthcare Trust | Walmart vs. Trellus Health plc | Walmart vs. Target Healthcare REIT | Walmart vs. Molson Coors Beverage |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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