Correlation Between Walmart and Grupo Concesionario
Can any of the company-specific risk be diversified away by investing in both Walmart and Grupo Concesionario 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 Grupo Concesionario into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Grupo Concesionario del, you can compare the effects of market volatilities on Walmart and Grupo Concesionario 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 Grupo Concesionario. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Grupo Concesionario.
Diversification Opportunities for Walmart and Grupo Concesionario
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walmart and Grupo is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Grupo Concesionario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Concesionario del 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 Grupo Concesionario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Concesionario del has no effect on the direction of Walmart i.e., Walmart and Grupo Concesionario go up and down completely randomly.
Pair Corralation between Walmart and Grupo Concesionario
Assuming the 90 days trading horizon Walmart is expected to generate 0.67 times more return on investment than Grupo Concesionario. However, Walmart is 1.5 times less risky than Grupo Concesionario. It trades about 0.07 of its potential returns per unit of risk. Grupo Concesionario del is currently generating about -0.14 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 | 100.0% |
| Values | Daily Returns |
Walmart vs. Grupo Concesionario del
Performance |
| Timeline |
| Walmart |
| Grupo Concesionario del |
Walmart and Grupo Concesionario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Grupo Concesionario
The main advantage of trading using opposite Walmart and Grupo Concesionario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Grupo Concesionario 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 Grupo Concesionario will offset losses from the drop in Grupo Concesionario's long position.| Walmart vs. United States Steel | Walmart vs. Telecom Argentina | Walmart vs. Transportadora de Gas | Walmart vs. Agrometal SAI |
| Grupo Concesionario vs. Harmony Gold Mining | Grupo Concesionario vs. Agrometal SAI | Grupo Concesionario vs. Telecom Argentina | Grupo Concesionario vs. Transportadora de Gas |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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