Correlation Between Wal Mart and Walmart
Can any of the company-specific risk be diversified away by investing in both Wal Mart 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 Wal Mart and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wal Mart de and Walmart, you can compare the effects of market volatilities on Wal Mart 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 Wal Mart with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wal Mart and Walmart.
Diversification Opportunities for Wal Mart and Walmart
Pay attention - limited upside
The 3 months correlation between Wal and Walmart is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Wal Mart de and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Wal Mart 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 Wal Mart de 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 Wal Mart i.e., Wal Mart and Walmart go up and down completely randomly.
Pair Corralation between Wal Mart and Walmart
Assuming the 90 days horizon Wal Mart de is expected to under-perform the Walmart. In addition to that, Wal Mart is 1.57 times more volatile than Walmart. It trades about -0.17 of its total potential returns per unit of risk. Walmart is currently generating about 0.34 per unit of volatility. If you would invest 8,275 in Walmart on August 27, 2024 and sell it today you would earn a total of 675.00 from holding Walmart or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wal Mart de vs. Walmart
Performance |
| Timeline |
| Wal Mart de |
| Walmart |
Wal Mart and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wal Mart and Walmart
The main advantage of trading using opposite Wal Mart and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wal Mart 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.| Wal Mart vs. Embotelladora Andina SA | Wal Mart vs. Signet International Holdings | Wal Mart vs. National Beverage Corp | Wal Mart vs. PT Astra International |
| Walmart vs. Innovative Food Hldg | Walmart vs. Calavo Growers | Walmart vs. The Chefs Warehouse | Walmart vs. AMCON Distributing |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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