Correlation Between Economic Investment and Walmart
Can any of the company-specific risk be diversified away by investing in both Economic Investment 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 Economic Investment and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Economic Investment Trust and Walmart Inc CDR, you can compare the effects of market volatilities on Economic Investment 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 Economic Investment with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Economic Investment and Walmart.
Diversification Opportunities for Economic Investment and Walmart
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Economic and Walmart is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Economic Investment Trust 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 Economic Investment 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 Economic Investment Trust 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 Economic Investment i.e., Economic Investment and Walmart go up and down completely randomly.
Pair Corralation between Economic Investment and Walmart
Assuming the 90 days trading horizon Economic Investment Trust is expected to generate 0.6 times more return on investment than Walmart. However, Economic Investment Trust is 1.67 times less risky than Walmart. It trades about 0.17 of its potential returns per unit of risk. Walmart Inc CDR is currently generating about -0.02 per unit of risk. If you would invest 18,160 in Economic Investment Trust on November 29, 2024 and sell it today you would earn a total of 840.00 from holding Economic Investment Trust or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Economic Investment Trust vs. Walmart Inc CDR
Performance |
| Timeline |
| Economic Investment Trust |
| Walmart Inc CDR |
Economic Investment and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Economic Investment and Walmart
The main advantage of trading using opposite Economic Investment and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Economic Investment 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.| Economic Investment vs. Uniteds Limited | Economic Investment vs. E L Financial Corp | Economic Investment vs. Canadian General Investments | Economic Investment vs. Clairvest Group |
| Walmart vs. Westshore Terminals Investment | Walmart vs. Champion Gaming Group | Walmart vs. Economic Investment Trust | Walmart vs. Farstarcap Investment Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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