Correlation Between Walmart and Precigen
Can any of the company-specific risk be diversified away by investing in both Walmart and Precigen 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 Precigen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Precigen, you can compare the effects of market volatilities on Walmart and Precigen 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 Precigen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Precigen.
Diversification Opportunities for Walmart and Precigen
Very good diversification
The 3 months correlation between Walmart and Precigen is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Precigen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precigen 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 Precigen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precigen has no effect on the direction of Walmart i.e., Walmart and Precigen go up and down completely randomly.
Pair Corralation between Walmart and Precigen
Assuming the 90 days horizon Walmart is expected to generate 0.32 times more return on investment than Precigen. However, Walmart is 3.14 times less risky than Precigen. It trades about 0.42 of its potential returns per unit of risk. Precigen is currently generating about 0.1 per unit of risk. If you would invest 7,615 in Walmart on August 30, 2024 and sell it today you would earn a total of 1,085 from holding Walmart or generate 14.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Walmart vs. Precigen
Performance |
| Timeline |
| Walmart |
| Precigen |
Walmart and Precigen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Precigen
The main advantage of trading using opposite Walmart and Precigen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Precigen 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 Precigen will offset losses from the drop in Precigen's long position.| Walmart vs. Verizon Communications | Walmart vs. THAI BEVERAGE | Walmart vs. Chesapeake Utilities | Walmart vs. Internet Thailand PCL |
| Precigen vs. Playtech plc | Precigen vs. KOOL2PLAY SA ZY | Precigen vs. PLAYSTUDIOS A DL 0001 | Precigen vs. COLUMBIA SPORTSWEAR |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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