Correlation Between Walmart and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Walmart and McEwen Mining 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 McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and McEwen Mining, you can compare the effects of market volatilities on Walmart and McEwen Mining 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 McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and McEwen Mining.
Diversification Opportunities for Walmart and McEwen Mining
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and McEwen is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining 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 McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Walmart i.e., Walmart and McEwen Mining go up and down completely randomly.
Pair Corralation between Walmart and McEwen Mining
Assuming the 90 days trading horizon Walmart is expected to generate 0.03 times more return on investment than McEwen Mining. However, Walmart is 31.87 times less risky than McEwen Mining. It trades about 0.22 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.13 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 | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Walmart vs. McEwen Mining
Performance |
| Timeline |
| Walmart |
| McEwen Mining |
Walmart and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and McEwen Mining
The main advantage of trading using opposite Walmart and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.| Walmart vs. MT Bank Corp | Walmart vs. Rosslyn Data Technologies | Walmart vs. Moneta Money Bank | Walmart vs. Bloomsbury Publishing Plc |
| McEwen Mining vs. Adriatic Metals | McEwen Mining vs. Fulcrum Metals PLC | McEwen Mining vs. JB Hunt Transport | McEwen Mining vs. Impax Asset Management |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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