Correlation Between Calavo Growers and Walmart
Can any of the company-specific risk be diversified away by investing in both Calavo Growers 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 Calavo Growers and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calavo Growers and Walmart, you can compare the effects of market volatilities on Calavo Growers 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 Calavo Growers with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calavo Growers and Walmart.
Diversification Opportunities for Calavo Growers and Walmart
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Calavo and Walmart is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Calavo Growers and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Calavo Growers 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 Calavo Growers 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 Calavo Growers i.e., Calavo Growers and Walmart go up and down completely randomly.
Pair Corralation between Calavo Growers and Walmart
Given the investment horizon of 90 days Calavo Growers is expected to generate 2.15 times more return on investment than Walmart. However, Calavo Growers is 2.15 times more volatile than Walmart. It trades about 0.14 of its potential returns per unit of risk. Walmart is currently generating about 0.26 per unit of risk. If you would invest 2,278 in Calavo Growers on August 31, 2024 and sell it today you would earn a total of 485.00 from holding Calavo Growers or generate 21.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calavo Growers vs. Walmart
Performance |
| Timeline |
| Calavo Growers |
| Walmart |
Calavo Growers and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calavo Growers and Walmart
The main advantage of trading using opposite Calavo Growers and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calavo Growers 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.| Calavo Growers vs. SpartanNash Co | Calavo Growers vs. The Andersons | Calavo Growers vs. The Chefs Warehouse | Calavo Growers vs. Hf Foods Group |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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