Correlation Between Walmart and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Walmart and Host Hotels 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 Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Host Hotels Resorts, you can compare the effects of market volatilities on Walmart and Host Hotels 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 Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Host Hotels.
Diversification Opportunities for Walmart and Host Hotels
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and Host is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts 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 Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of Walmart i.e., Walmart and Host Hotels go up and down completely randomly.
Pair Corralation between Walmart and Host Hotels
If you would invest 5,960 in Walmart on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Walmart or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Walmart vs. Host Hotels Resorts
Performance |
| Timeline |
| Walmart |
| Host Hotels Resorts |
Walmart and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Host Hotels
The main advantage of trading using opposite Walmart and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Host Hotels 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 Host Hotels will offset losses from the drop in Host Hotels' long position.| Walmart vs. Spire Healthcare Group | Walmart vs. Eco Animal Health | Walmart vs. JLEN Environmental Assets | Walmart vs. Foresight Environmental Infrastructure |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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