Correlation Between Walmart and BTG Pactual
Can any of the company-specific risk be diversified away by investing in both Walmart and BTG Pactual 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 Walmart and BTG Pactual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and BTG Pactual Logstica, you can compare the effects of market volatilities on Walmart and BTG Pactual 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 Walmart with a short position of BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and BTG Pactual.
Diversification Opportunities for Walmart and BTG Pactual
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and BTG is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and BTG Pactual Logstica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTG Pactual Logstica and Walmart 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 Walmart are associated (or correlated) with BTG Pactual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTG Pactual Logstica has no effect on the direction of Walmart i.e., Walmart and BTG Pactual go up and down completely randomly.
Pair Corralation between Walmart and BTG Pactual
Assuming the 90 days trading horizon Walmart is expected to generate 2.46 times more return on investment than BTG Pactual. However, Walmart is 2.46 times more volatile than BTG Pactual Logstica. It trades about 0.43 of its potential returns per unit of risk. BTG Pactual Logstica is currently generating about -0.16 per unit of risk. If you would invest 3,015 in Walmart on September 2, 2024 and sell it today you would earn a total of 464.00 from holding Walmart or generate 15.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. BTG Pactual Logstica
Performance |
| Timeline |
| Walmart |
| BTG Pactual Logstica |
Walmart and BTG Pactual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and BTG Pactual
The main advantage of trading using opposite Walmart and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, BTG Pactual 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 BTG Pactual will offset losses from the drop in BTG Pactual's long position.| Walmart vs. The Bank of | Walmart vs. Multilaser Industrial SA | Walmart vs. GP Investments | Walmart vs. Mitsubishi UFJ Financial |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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