Correlation Between Walmart and First Majestic
Can any of the company-specific risk be diversified away by investing in both Walmart and First Majestic 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 First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and First Majestic Silver, you can compare the effects of market volatilities on Walmart and First Majestic 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 First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and First Majestic.
Diversification Opportunities for Walmart and First Majestic
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and First is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and First Majestic Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Majestic Silver 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 First Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Majestic Silver has no effect on the direction of Walmart i.e., Walmart and First Majestic go up and down completely randomly.
Pair Corralation between Walmart and First Majestic
Assuming the 90 days trading horizon Walmart is expected to generate 0.02 times more return on investment than First Majestic. However, Walmart is 42.74 times less risky than First Majestic. It trades about 0.23 of its potential returns per unit of risk. First Majestic Silver is currently generating about -0.1 per unit of risk. If you would invest 5,939 in Walmart on October 12, 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 | 100.0% |
| Values | Daily Returns |
Walmart vs. First Majestic Silver
Performance |
| Timeline |
| Walmart |
| First Majestic Silver |
Walmart and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and First Majestic
The main advantage of trading using opposite Walmart and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, First Majestic 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 First Majestic will offset losses from the drop in First Majestic's long position.| Walmart vs. Worldwide Healthcare Trust | Walmart vs. Trellus Health plc | Walmart vs. Target Healthcare REIT | Walmart vs. Molson Coors Beverage |
| First Majestic vs. Walmart | First Majestic vs. BYD Co | First Majestic vs. Volkswagen AG | First Majestic vs. Volkswagen AG Non Vtg |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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