Correlation Between PT Bank and Walmart
Can any of the company-specific risk be diversified away by investing in both PT Bank 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 PT Bank and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Mandiri and Walmart, you can compare the effects of market volatilities on PT Bank 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 PT Bank with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Walmart.
Diversification Opportunities for PT Bank and Walmart
Excellent diversification
The 3 months correlation between PQ9 and Walmart is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and PT Bank 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 PT Bank Mandiri 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 PT Bank i.e., PT Bank and Walmart go up and down completely randomly.
Pair Corralation between PT Bank and Walmart
Assuming the 90 days horizon PT Bank is expected to generate 1.05 times less return on investment than Walmart. In addition to that, PT Bank is 3.83 times more volatile than Walmart. It trades about 0.03 of its total potential returns per unit of risk. Walmart is currently generating about 0.11 per unit of volatility. If you would invest 4,676 in Walmart on August 27, 2024 and sell it today you would earn a total of 3,925 from holding Walmart or generate 83.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Mandiri vs. Walmart
Performance |
| Timeline |
| PT Bank Mandiri |
| Walmart |
PT Bank and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Walmart
The main advantage of trading using opposite PT Bank and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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.| PT Bank vs. Lamar Advertising | PT Bank vs. JD SPORTS FASH | PT Bank vs. PLAYTIKA HOLDING DL 01 | PT Bank vs. LG Display Co |
| Walmart vs. Air Lease | Walmart vs. GEELY AUTOMOBILE | Walmart vs. United Rentals | Walmart vs. SERI INDUSTRIAL EO |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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