Correlation Between Lendinvest PLC and Walmart
Can any of the company-specific risk be diversified away by investing in both Lendinvest 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 Lendinvest PLC and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Walmart, you can compare the effects of market volatilities on Lendinvest 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 Lendinvest PLC with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Walmart.
Diversification Opportunities for Lendinvest PLC and Walmart
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lendinvest and Walmart is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Lendinvest 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 Lendinvest 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 Lendinvest PLC i.e., Lendinvest PLC and Walmart go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Walmart
Assuming the 90 days trading horizon Lendinvest PLC is expected to under-perform the Walmart. But the stock apears to be less risky and, when comparing its historical volatility, Lendinvest PLC is 6.65 times less risky than Walmart. The stock trades about -0.08 of its potential returns per unit of risk. The Walmart is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,343 in Walmart on September 1, 2024 and sell it today you would earn a total of 1,617 from holding Walmart or generate 37.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.56% |
| Values | Daily Returns |
Lendinvest PLC vs. Walmart
Performance |
| Timeline |
| Lendinvest PLC |
| Walmart |
Lendinvest PLC and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Walmart
The main advantage of trading using opposite Lendinvest PLC and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest 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.| Lendinvest PLC vs. Samsung Electronics Co | Lendinvest PLC vs. Samsung Electronics Co | Lendinvest PLC vs. Toyota Motor Corp | Lendinvest PLC vs. Reliance Industries Ltd |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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