Correlation Between Walmart and AcadeMedia
Can any of the company-specific risk be diversified away by investing in both Walmart and AcadeMedia 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 AcadeMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and AcadeMedia AB, you can compare the effects of market volatilities on Walmart and AcadeMedia 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 AcadeMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and AcadeMedia.
Diversification Opportunities for Walmart and AcadeMedia
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walmart and AcadeMedia is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB 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 AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of Walmart i.e., Walmart and AcadeMedia go up and down completely randomly.
Pair Corralation between Walmart and AcadeMedia
Assuming the 90 days trading horizon Walmart is expected to generate 40.04 times less return on investment than AcadeMedia. But when comparing it to its historical volatility, Walmart is 36.14 times less risky than AcadeMedia. It trades about 0.12 of its potential returns per unit of risk. AcadeMedia AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,270 in AcadeMedia AB on October 13, 2024 and sell it today you would earn a total of 1,560 from holding AcadeMedia AB or generate 29.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. AcadeMedia AB
Performance |
| Timeline |
| Walmart |
| AcadeMedia AB |
Walmart and AcadeMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and AcadeMedia
The main advantage of trading using opposite Walmart and AcadeMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, AcadeMedia 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 AcadeMedia will offset losses from the drop in AcadeMedia's long position.| Walmart vs. Baker Steel Resources | Walmart vs. Morgan Advanced Materials | Walmart vs. Dentsply Sirona | Walmart vs. Foresight Environmental Infrastructure |
| AcadeMedia vs. Walmart | AcadeMedia vs. BYD Co | AcadeMedia vs. Volkswagen AG | AcadeMedia 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stocks Directory Find actively traded stocks across global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |