Correlation Between Walmart and St Galler
Can any of the company-specific risk be diversified away by investing in both Walmart and St Galler 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 St Galler into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and St Galler Kantonalbank, you can compare the effects of market volatilities on Walmart and St Galler 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 St Galler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and St Galler.
Diversification Opportunities for Walmart and St Galler
Very weak diversification
The 3 months correlation between Walmart and 0QQZ is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and St Galler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Galler Kantonalbank 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 St Galler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Galler Kantonalbank has no effect on the direction of Walmart i.e., Walmart and St Galler go up and down completely randomly.
Pair Corralation between Walmart and St Galler
Assuming the 90 days trading horizon Walmart is expected to generate 12.64 times less return on investment than St Galler. But when comparing it to its historical volatility, Walmart is 9.58 times less risky than St Galler. It trades about 0.22 of its potential returns per unit of risk. St Galler Kantonalbank is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 43,200 in St Galler Kantonalbank on October 10, 2024 and sell it today you would earn a total of 1,950 from holding St Galler Kantonalbank or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. St Galler Kantonalbank
Performance |
| Timeline |
| Walmart |
| St Galler Kantonalbank |
Walmart and St Galler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and St Galler
The main advantage of trading using opposite Walmart and St Galler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, St Galler 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 St Galler will offset losses from the drop in St Galler's long position.| Walmart vs. MT Bank Corp | Walmart vs. Rosslyn Data Technologies | Walmart vs. Moneta Money Bank | Walmart vs. Bloomsbury Publishing Plc |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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