Correlation Between Ocado Group and Walmart
Can any of the company-specific risk be diversified away by investing in both Ocado 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 Ocado Group and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocado Group plc and Walmart, you can compare the effects of market volatilities on Ocado 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 Ocado Group with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocado Group and Walmart.
Diversification Opportunities for Ocado Group and Walmart
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ocado and Walmart is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ocado Group plc and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Ocado 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 Ocado 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 Ocado Group i.e., Ocado Group and Walmart go up and down completely randomly.
Pair Corralation between Ocado Group and Walmart
Assuming the 90 days horizon Ocado Group plc is expected to under-perform the Walmart. In addition to that, Ocado Group is 2.6 times more volatile than Walmart. It trades about -0.22 of its total potential returns per unit of risk. Walmart is currently generating about 0.53 per unit of volatility. If you would invest 8,245 in Walmart on September 3, 2024 and sell it today you would earn a total of 1,005 from holding Walmart or generate 12.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocado Group plc vs. Walmart
Performance |
| Timeline |
| Ocado Group plc |
| Walmart |
Ocado Group and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocado Group and Walmart
The main advantage of trading using opposite Ocado Group and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocado 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.| Ocado Group vs. Natural Grocers by | Ocado Group vs. Grocery Outlet Holding | Ocado Group vs. Village Super Market | Ocado Group vs. Ingles Markets Incorporated |
| Walmart vs. Partner Communications | Walmart vs. Merck Company | Walmart vs. Western Midstream Partners | Walmart vs. Edgewise Therapeutics |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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