Correlation Between IPC MEXICO and Walmart
Can any of the company-specific risk be diversified away by investing in both IPC MEXICO 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 IPC MEXICO and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPC MEXICO and Walmart, you can compare the effects of market volatilities on IPC MEXICO 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 IPC MEXICO with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPC MEXICO and Walmart.
Diversification Opportunities for IPC MEXICO and Walmart
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IPC and Walmart is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding IPC MEXICO and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and IPC MEXICO 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 IPC MEXICO 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 IPC MEXICO i.e., IPC MEXICO and Walmart go up and down completely randomly.
Pair Corralation between IPC MEXICO and Walmart
Assuming the 90 days trading horizon IPC MEXICO is expected to under-perform the Walmart. But the index apears to be less risky and, when comparing its historical volatility, IPC MEXICO is 1.93 times less risky than Walmart. The index trades about -0.12 of its potential returns per unit of risk. The Walmart is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 165,700 in Walmart on August 28, 2024 and sell it today you would earn a total of 15,300 from holding Walmart or generate 9.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
IPC MEXICO vs. Walmart
Performance |
| Timeline |
IPC MEXICO and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
IPC MEXICO
Pair trading matchups for IPC MEXICO
Walmart
Pair trading matchups for Walmart
Pair Trading with IPC MEXICO and Walmart
The main advantage of trading using opposite IPC MEXICO and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPC MEXICO 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.| IPC MEXICO vs. New Oriental Education | IPC MEXICO vs. First Republic Bank | IPC MEXICO vs. Deutsche Bank Aktiengesellschaft | IPC MEXICO vs. Costco Wholesale |
| Walmart vs. Micron Technology | Walmart vs. McEwen Mining | Walmart vs. Grupo Sports World | Walmart vs. Applied Materials |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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