Correlation Between Chatham Rock and Walmart
Can any of the company-specific risk be diversified away by investing in both Chatham Rock 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 Chatham Rock and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chatham Rock Phosphate and Walmart Inc CDR, you can compare the effects of market volatilities on Chatham Rock 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 Chatham Rock with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chatham Rock and Walmart.
Diversification Opportunities for Chatham Rock and Walmart
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chatham and Walmart is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Chatham Rock Phosphate and Walmart Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart Inc CDR and Chatham Rock 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 Chatham Rock Phosphate 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 Inc CDR has no effect on the direction of Chatham Rock i.e., Chatham Rock and Walmart go up and down completely randomly.
Pair Corralation between Chatham Rock and Walmart
Assuming the 90 days horizon Chatham Rock is expected to generate 1.49 times less return on investment than Walmart. In addition to that, Chatham Rock is 6.38 times more volatile than Walmart Inc CDR. It trades about 0.02 of its total potential returns per unit of risk. Walmart Inc CDR is currently generating about 0.17 per unit of volatility. If you would invest 2,367 in Walmart Inc CDR on August 25, 2024 and sell it today you would earn a total of 1,568 from holding Walmart Inc CDR or generate 66.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Chatham Rock Phosphate vs. Walmart Inc CDR
Performance |
| Timeline |
| Chatham Rock Phosphate |
| Walmart Inc CDR |
Chatham Rock and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chatham Rock and Walmart
The main advantage of trading using opposite Chatham Rock and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chatham Rock 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.| Chatham Rock vs. First Majestic Silver | Chatham Rock vs. Ivanhoe Energy | Chatham Rock vs. Orezone Gold Corp | Chatham Rock vs. Faraday Copper Corp |
| Walmart vs. Chatham Rock Phosphate | Walmart vs. Alaska Energy Metals | Walmart vs. Elixxer | Walmart vs. Cielo Waste Solutions |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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