Correlation Between Walmart and Matba Rofex
Can any of the company-specific risk be diversified away by investing in both Walmart and Matba Rofex 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 Matba Rofex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Matba Rofex SA, you can compare the effects of market volatilities on Walmart and Matba Rofex 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 Matba Rofex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Matba Rofex.
Diversification Opportunities for Walmart and Matba Rofex
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walmart and Matba is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Matba Rofex SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matba Rofex SA 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 Matba Rofex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matba Rofex SA has no effect on the direction of Walmart i.e., Walmart and Matba Rofex go up and down completely randomly.
Pair Corralation between Walmart and Matba Rofex
Assuming the 90 days trading horizon Walmart is expected to generate 0.6 times more return on investment than Matba Rofex. However, Walmart is 1.66 times less risky than Matba Rofex. It trades about 0.07 of its potential returns per unit of risk. Matba Rofex SA is currently generating about -0.3 per unit of risk. If you would invest 599,000 in Walmart on October 20, 2024 and sell it today you would earn a total of 10,000 from holding Walmart or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Walmart vs. Matba Rofex SA
Performance |
| Timeline |
| Walmart |
| Matba Rofex SA |
Walmart and Matba Rofex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Matba Rofex
The main advantage of trading using opposite Walmart and Matba Rofex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Matba Rofex 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 Matba Rofex will offset losses from the drop in Matba Rofex's long position.| Walmart vs. United States Steel | Walmart vs. Telecom Argentina | Walmart vs. Transportadora de Gas | Walmart vs. Agrometal SAI |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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