Correlation Between Natural Health and Walmart
Can any of the company-specific risk be diversified away by investing in both Natural Health 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 Natural Health and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trends and Walmart, you can compare the effects of market volatilities on Natural Health 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 Natural Health with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and Walmart.
Diversification Opportunities for Natural Health and Walmart
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Natural and Walmart is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trends and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Natural Health 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 Natural Health Trends 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 Natural Health i.e., Natural Health and Walmart go up and down completely randomly.
Pair Corralation between Natural Health and Walmart
Assuming the 90 days trading horizon Natural Health Trends is expected to under-perform the Walmart. In addition to that, Natural Health is 1.62 times more volatile than Walmart. It trades about -0.47 of its total potential returns per unit of risk. Walmart is currently generating about 0.37 per unit of volatility. If you would invest 8,040 in Walmart on September 15, 2024 and sell it today you would earn a total of 959.00 from holding Walmart or generate 11.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trends vs. Walmart
Performance |
| Timeline |
| Natural Health Trends |
| Walmart |
Natural Health and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and Walmart
The main advantage of trading using opposite Natural Health and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health 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.| Natural Health vs. Apple Inc | Natural Health vs. Apple Inc | Natural Health vs. Apple Inc | Natural Health vs. Apple Inc |
| Walmart vs. ATRYS HEALTH SA | Walmart vs. Dairy Farm International | Walmart vs. Natural Health Trends | Walmart vs. DiamondRock Hospitality |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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