Correlation Between Walmart and Hartford Financial
Can any of the company-specific risk be diversified away by investing in both Walmart and Hartford Financial 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 Hartford Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Hartford Financial Services, you can compare the effects of market volatilities on Walmart and Hartford Financial 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 Hartford Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Hartford Financial.
Diversification Opportunities for Walmart and Hartford Financial
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and Hartford is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Hartford Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Financial 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 Hartford Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Financial has no effect on the direction of Walmart i.e., Walmart and Hartford Financial go up and down completely randomly.
Pair Corralation between Walmart and Hartford Financial
Assuming the 90 days trading horizon Walmart is expected to generate 0.07 times more return on investment than Hartford Financial. However, Walmart is 13.62 times less risky than Hartford Financial. It trades about 0.23 of its potential returns per unit of risk. Hartford Financial Services is currently generating about -0.25 per unit of risk. If you would invest 5,939 in Walmart on October 10, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Hartford Financial Services
Performance |
| Timeline |
| Walmart |
| Hartford Financial |
Walmart and Hartford Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Hartford Financial
The main advantage of trading using opposite Walmart and Hartford Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Hartford Financial 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 Hartford Financial will offset losses from the drop in Hartford Financial's long position.| Walmart vs. MT Bank Corp | Walmart vs. Rosslyn Data Technologies | Walmart vs. Moneta Money Bank | Walmart vs. Bloomsbury Publishing Plc |
| Hartford Financial vs. Livermore Investments Group | Hartford Financial vs. Wizz Air Holdings | Hartford Financial vs. Sealed Air Corp | Hartford Financial vs. New Residential Investment |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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