Correlation Between Alaska Energy and Walmart
Can any of the company-specific risk be diversified away by investing in both Alaska Energy and Walmart 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 Alaska Energy and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alaska Energy Metals and Walmart Inc CDR, you can compare the effects of market volatilities on Alaska Energy and Walmart 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 Alaska Energy with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Energy and Walmart.
Diversification Opportunities for Alaska Energy and Walmart
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alaska and Walmart is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Energy Metals and Walmart Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart Inc CDR and Alaska Energy 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 Alaska Energy Metals are associated (or correlated) with Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart Inc CDR has no effect on the direction of Alaska Energy i.e., Alaska Energy and Walmart go up and down completely randomly.
Pair Corralation between Alaska Energy and Walmart
Assuming the 90 days trading horizon Alaska Energy Metals is expected to under-perform the Walmart. In addition to that, Alaska Energy is 6.98 times more volatile than Walmart Inc CDR. It trades about -0.04 of its total potential returns per unit of risk. Walmart Inc CDR is currently generating about 0.17 per unit of volatility. If you would invest 2,367 in Walmart Inc CDR on August 25, 2024 and sell it today you would earn a total of 1,568 from holding Walmart Inc CDR or generate 66.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Alaska Energy Metals vs. Walmart Inc CDR
Performance |
| Timeline |
| Alaska Energy Metals |
| Walmart Inc CDR |
Alaska Energy and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Energy and Walmart
The main advantage of trading using opposite Alaska Energy and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Energy position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.| Alaska Energy vs. First Majestic Silver | Alaska Energy vs. Ivanhoe Energy | Alaska Energy vs. Orezone Gold Corp | Alaska Energy vs. Faraday Copper Corp |
| Walmart vs. Chatham Rock Phosphate | Walmart vs. Alaska Energy Metals | Walmart vs. Elixxer | Walmart vs. Cielo Waste Solutions |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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