Correlation Between GlobalData PLC and Walmart
Can any of the company-specific risk be diversified away by investing in both GlobalData PLC 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 GlobalData PLC and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalData PLC and Walmart, you can compare the effects of market volatilities on GlobalData PLC 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 GlobalData PLC with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalData PLC and Walmart.
Diversification Opportunities for GlobalData PLC and Walmart
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlobalData and Walmart is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding GlobalData PLC and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and GlobalData PLC 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 GlobalData 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 GlobalData PLC i.e., GlobalData PLC and Walmart go up and down completely randomly.
Pair Corralation between GlobalData PLC and Walmart
Assuming the 90 days trading horizon GlobalData PLC is expected to under-perform the Walmart. In addition to that, GlobalData PLC is 16.96 times more volatile than Walmart. It trades about -0.35 of its total potential returns per unit of risk. Walmart is currently generating about 0.22 per unit of volatility. If you would invest 5,939 in Walmart on September 24, 2024 and sell it today you would earn a total of 21.00 from holding Walmart or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlobalData PLC vs. Walmart
Performance |
| Timeline |
| GlobalData PLC |
| Walmart |
GlobalData PLC and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalData PLC and Walmart
The main advantage of trading using opposite GlobalData PLC and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalData PLC 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.| GlobalData PLC vs. Toyota Motor Corp | GlobalData PLC vs. SoftBank Group Corp | GlobalData PLC vs. Fannie Mae | GlobalData PLC vs. Panasonic Corp |
| Walmart vs. GlobalData PLC | Walmart vs. Science in Sport | Walmart vs. Automatic Data Processing | Walmart vs. Erste Group Bank |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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