Correlation Between Live Ventures and Walmart
Can any of the company-specific risk be diversified away by investing in both Live Ventures 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 Live Ventures and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Ventures and Walmart, you can compare the effects of market volatilities on Live Ventures 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 Live Ventures with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Ventures and Walmart.
Diversification Opportunities for Live Ventures and Walmart
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Live and Walmart is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Live Ventures 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 Live Ventures 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 Live Ventures i.e., Live Ventures and Walmart go up and down completely randomly.
Pair Corralation between Live Ventures and Walmart
Given the investment horizon of 90 days Live Ventures is expected to generate 1.69 times less return on investment than Walmart. In addition to that, Live Ventures is 4.31 times more volatile than Walmart. It trades about 0.06 of its total potential returns per unit of risk. Walmart is currently generating about 0.47 per unit of volatility. If you would invest 8,499 in Walmart on September 13, 2024 and sell it today you would earn a total of 1,029 from holding Walmart or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Ventures vs. Walmart
Performance |
| Timeline |
| Live Ventures |
| Walmart |
Live Ventures and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Ventures and Walmart
The main advantage of trading using opposite Live Ventures and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Ventures 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.| Live Ventures vs. Arhaus Inc | Live Ventures vs. Floor Decor Holdings | Live Ventures vs. Kingfisher plc | Live Ventures vs. Haverty Furniture Companies |
| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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