Correlation Between Canadian General and Walmart
Can any of the company-specific risk be diversified away by investing in both Canadian General 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 Canadian General and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian General Investments and Walmart Inc CDR, you can compare the effects of market volatilities on Canadian General 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 Canadian General with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Walmart.
Diversification Opportunities for Canadian General and Walmart
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canadian and Walmart is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments 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 Canadian General 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 Canadian General Investments 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 Canadian General i.e., Canadian General and Walmart go up and down completely randomly.
Pair Corralation between Canadian General and Walmart
Assuming the 90 days trading horizon Canadian General is expected to generate 1.89 times less return on investment than Walmart. But when comparing it to its historical volatility, Canadian General Investments is 1.06 times less risky than Walmart. It trades about 0.16 of its potential returns per unit of risk. Walmart Inc CDR is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,368 in Walmart Inc CDR on September 4, 2024 and sell it today you would earn a total of 700.00 from holding Walmart Inc CDR or generate 20.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian General Investments vs. Walmart Inc CDR
Performance |
| Timeline |
| Canadian General Inv |
| Walmart Inc CDR |
Canadian General and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Walmart
The main advantage of trading using opposite Canadian General and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General 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.| Canadian General vs. Uniteds Limited | Canadian General vs. Economic Investment Trust | Canadian General vs. abrdn Asia Pacific | Canadian General vs. Clairvest Group |
| Walmart vs. Canadian General Investments | Walmart vs. Contagious Gaming | Walmart vs. Maple Peak Investments | Walmart vs. Upstart Investments |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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