Correlation Between Agrometal SAI and Walmart
Can any of the company-specific risk be diversified away by investing in both Agrometal SAI 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 Agrometal SAI and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agrometal SAI and Walmart, you can compare the effects of market volatilities on Agrometal SAI 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 Agrometal SAI with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrometal SAI and Walmart.
Diversification Opportunities for Agrometal SAI and Walmart
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agrometal and Walmart is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Agrometal SAI and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Agrometal SAI 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 Agrometal SAI 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 has no effect on the direction of Agrometal SAI i.e., Agrometal SAI and Walmart go up and down completely randomly.
Pair Corralation between Agrometal SAI and Walmart
Assuming the 90 days trading horizon Agrometal SAI is expected to under-perform the Walmart. In addition to that, Agrometal SAI is 3.72 times more volatile than Walmart. It trades about -0.06 of its total potential returns per unit of risk. Walmart is currently generating about 0.47 per unit of volatility. If you would invest 588,000 in Walmart on November 2, 2024 and sell it today you would earn a total of 57,000 from holding Walmart or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Agrometal SAI vs. Walmart
Performance |
| Timeline |
| Agrometal SAI |
| Walmart |
Agrometal SAI and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrometal SAI and Walmart
The main advantage of trading using opposite Agrometal SAI and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrometal SAI 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.| Agrometal SAI vs. Harmony Gold Mining | Agrometal SAI vs. Compania de Transporte | Agrometal SAI vs. Transportadora de Gas |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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