Correlation Between Chefs Warehouse and Walmart
Can any of the company-specific risk be diversified away by investing in both Chefs Warehouse 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 Chefs Warehouse and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Chefs Warehouse and Walmart, you can compare the effects of market volatilities on Chefs Warehouse 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 Chefs Warehouse with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chefs Warehouse and Walmart.
Diversification Opportunities for Chefs Warehouse and Walmart
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chefs and Walmart is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding The Chefs Warehouse and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Chefs Warehouse 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 The Chefs Warehouse 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 Chefs Warehouse i.e., Chefs Warehouse and Walmart go up and down completely randomly.
Pair Corralation between Chefs Warehouse and Walmart
Given the investment horizon of 90 days Chefs Warehouse is expected to generate 2.88 times less return on investment than Walmart. In addition to that, Chefs Warehouse is 1.8 times more volatile than Walmart. It trades about 0.05 of its total potential returns per unit of risk. Walmart is currently generating about 0.26 per unit of volatility. If you would invest 7,717 in Walmart on August 31, 2024 and sell it today you would earn a total of 1,471 from holding Walmart or generate 19.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Chefs Warehouse vs. Walmart
Performance |
| Timeline |
| Chefs Warehouse |
| Walmart |
Chefs Warehouse and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chefs Warehouse and Walmart
The main advantage of trading using opposite Chefs Warehouse and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chefs Warehouse 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.| Chefs Warehouse vs. US Foods Holding | Chefs Warehouse vs. Sysco | Chefs Warehouse vs. SpartanNash Co | Chefs Warehouse vs. Calavo Growers |
| Walmart vs. Target | Walmart vs. Dollar General | Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield |
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.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |