Correlation Between Compass Group and Walmart
Can any of the company-specific risk be diversified away by investing in both Compass Group 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 Compass Group and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compass Group PLC and Walmart, you can compare the effects of market volatilities on Compass Group 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 Compass Group with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Group and Walmart.
Diversification Opportunities for Compass Group and Walmart
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compass and Walmart is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compass Group PLC and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Compass Group 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 Compass Group PLC 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 Compass Group i.e., Compass Group and Walmart go up and down completely randomly.
Pair Corralation between Compass Group and Walmart
If you would invest 253,000 in Compass Group PLC on August 30, 2024 and sell it today you would earn a total of 17,600 from holding Compass Group PLC or generate 6.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compass Group PLC vs. Walmart
Performance |
| Timeline |
| Compass Group PLC |
| Walmart |
Compass Group and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Group and Walmart
The main advantage of trading using opposite Compass Group and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Group 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.| Compass Group vs. Fresenius Medical Care | Compass Group vs. Albion Technology General | Compass Group vs. DXC Technology Co | Compass Group vs. Monster Beverage Corp |
| Walmart vs. Lendinvest PLC | Walmart vs. Neometals | Walmart vs. Albion Technology General | Walmart vs. Jupiter Fund Management |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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