Correlation Between Walmart and Agrometal SAI
Can any of the company-specific risk be diversified away by investing in both Walmart and Agrometal SAI 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 Agrometal SAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Agrometal SAI, you can compare the effects of market volatilities on Walmart and Agrometal SAI 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 Agrometal SAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Agrometal SAI.
Diversification Opportunities for Walmart and Agrometal SAI
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walmart and Agrometal is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Agrometal SAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrometal SAI 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 Agrometal SAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrometal SAI has no effect on the direction of Walmart i.e., Walmart and Agrometal SAI go up and down completely randomly.
Pair Corralation between Walmart and Agrometal SAI
Assuming the 90 days trading horizon Walmart is expected to generate 0.38 times more return on investment than Agrometal SAI. However, Walmart is 2.64 times less risky than Agrometal SAI. It trades about 0.29 of its potential returns per unit of risk. Agrometal SAI is currently generating about 0.02 per unit of risk. If you would invest 564,999 in Walmart on October 13, 2024 and sell it today you would earn a total of 52,001 from holding Walmart or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Walmart vs. Agrometal SAI
Performance |
| Timeline |
| Walmart |
| Agrometal SAI |
Walmart and Agrometal SAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Agrometal SAI
The main advantage of trading using opposite Walmart and Agrometal SAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Agrometal SAI 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 Agrometal SAI will offset losses from the drop in Agrometal SAI's long position.| Walmart vs. Transportadora de Gas | Walmart vs. Harmony Gold Mining | Walmart vs. Compania de Transporte | Walmart vs. United States Steel |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |