Correlation Between Mulberry Group and Walmart
Can any of the company-specific risk be diversified away by investing in both Mulberry Group 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 Mulberry Group and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mulberry Group PLC and Walmart, you can compare the effects of market volatilities on Mulberry Group 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 Mulberry Group with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Walmart.
Diversification Opportunities for Mulberry Group and Walmart
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mulberry and Walmart is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Mulberry Group 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 Mulberry Group 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 Mulberry Group i.e., Mulberry Group and Walmart go up and down completely randomly.
Pair Corralation between Mulberry Group and Walmart
Assuming the 90 days trading horizon Mulberry Group PLC is expected to under-perform the Walmart. But the stock apears to be less risky and, when comparing its historical volatility, Mulberry Group PLC is 4.77 times less risky than Walmart. The stock trades about -0.03 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 4,328 in Walmart on September 26, 2024 and sell it today you would earn a total of 1,632 from holding Walmart or generate 37.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.19% |
| Values | Daily Returns |
Mulberry Group PLC vs. Walmart
Performance |
| Timeline |
| Mulberry Group PLC |
| Walmart |
Mulberry Group and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mulberry Group and Walmart
The main advantage of trading using opposite Mulberry Group and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mulberry Group 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.| Mulberry Group vs. Rightmove PLC | Mulberry Group vs. Bioventix | Mulberry Group vs. VeriSign | Mulberry Group vs. Games Workshop Group |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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