Correlation Between FibraHotel and Walmart
Can any of the company-specific risk be diversified away by investing in both FibraHotel 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 FibraHotel and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FibraHotel and Walmart, you can compare the effects of market volatilities on FibraHotel 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 FibraHotel with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibraHotel and Walmart.
Diversification Opportunities for FibraHotel and Walmart
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FibraHotel and Walmart is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding FibraHotel and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and FibraHotel 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 FibraHotel 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 FibraHotel i.e., FibraHotel and Walmart go up and down completely randomly.
Pair Corralation between FibraHotel and Walmart
Assuming the 90 days trading horizon FibraHotel is expected to under-perform the Walmart. In addition to that, FibraHotel is 1.57 times more volatile than Walmart. It trades about 0.0 of its total potential returns per unit of risk. Walmart is currently generating about 0.26 per unit of volatility. If you would invest 153,500 in Walmart on September 2, 2024 and sell it today you would earn a total of 35,800 from holding Walmart or generate 23.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FibraHotel vs. Walmart
Performance |
| Timeline |
| FibraHotel |
| Walmart |
FibraHotel and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FibraHotel and Walmart
The main advantage of trading using opposite FibraHotel and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibraHotel 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.| FibraHotel vs. Lloyds Banking Group | FibraHotel vs. United States Steel | FibraHotel vs. Capital One Financial | FibraHotel vs. Micron Technology |
| Walmart vs. FibraHotel | Walmart vs. Applied Materials | Walmart vs. Cognizant Technology Solutions | Walmart vs. Hoteles City Express |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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