Correlation Between Walmart and Par Pacific
Can any of the company-specific risk be diversified away by investing in both Walmart and Par Pacific 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 Par Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Par Pacific Holdings, you can compare the effects of market volatilities on Walmart and Par Pacific 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 Par Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Par Pacific.
Diversification Opportunities for Walmart and Par Pacific
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and Par is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Par Pacific Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Par Pacific Holdings 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 Par Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Par Pacific Holdings has no effect on the direction of Walmart i.e., Walmart and Par Pacific go up and down completely randomly.
Pair Corralation between Walmart and Par Pacific
Assuming the 90 days horizon Walmart is expected to generate 1.08 times less return on investment than Par Pacific. But when comparing it to its historical volatility, Walmart is 1.7 times less risky than Par Pacific. It trades about 0.5 of its potential returns per unit of risk. Par Pacific Holdings is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,400 in Par Pacific Holdings on September 2, 2024 and sell it today you would earn a total of 230.00 from holding Par Pacific Holdings or generate 16.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Par Pacific Holdings
Performance |
| Timeline |
| Walmart |
| Par Pacific Holdings |
Walmart and Par Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Par Pacific
The main advantage of trading using opposite Walmart and Par Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Par Pacific 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 Par Pacific will offset losses from the drop in Par Pacific's long position.| Walmart vs. Federal Agricultural Mortgage | Walmart vs. CITY OFFICE REIT | Walmart vs. AGRICULTBK HADR25 YC | Walmart vs. Granite Construction |
| Par Pacific vs. Global Ship Lease | Par Pacific vs. G III Apparel Group | Par Pacific vs. Lendlease Group | Par Pacific vs. UNITED RENTALS |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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