Correlation Between Walmart and Intouch Holdings
Can any of the company-specific risk be diversified away by investing in both Walmart and Intouch Holdings 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 Intouch Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Intouch Holdings Public, you can compare the effects of market volatilities on Walmart and Intouch Holdings 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 Intouch Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Intouch Holdings.
Diversification Opportunities for Walmart and Intouch Holdings
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walmart and Intouch is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Intouch Holdings Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intouch Holdings Public 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 Intouch Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intouch Holdings Public has no effect on the direction of Walmart i.e., Walmart and Intouch Holdings go up and down completely randomly.
Pair Corralation between Walmart and Intouch Holdings
Assuming the 90 days horizon Walmart is expected to generate 0.79 times more return on investment than Intouch Holdings. However, Walmart is 1.26 times less risky than Intouch Holdings. It trades about 0.35 of its potential returns per unit of risk. Intouch Holdings Public is currently generating about -0.09 per unit of risk. If you would invest 7,668 in Walmart on August 28, 2024 and sell it today you would earn a total of 835.00 from holding Walmart or generate 10.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Intouch Holdings Public
Performance |
| Timeline |
| Walmart |
| Intouch Holdings Public |
Walmart and Intouch Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Intouch Holdings
The main advantage of trading using opposite Walmart and Intouch Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Intouch Holdings 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 Intouch Holdings will offset losses from the drop in Intouch Holdings' long position.| Walmart vs. Superior Plus Corp | Walmart vs. NMI Holdings | Walmart vs. Origin Agritech | Walmart vs. SIVERS SEMICONDUCTORS AB |
| Intouch Holdings vs. TELE2 AB UNSPADR12 | Intouch Holdings vs. Advanced Info Service | Intouch Holdings vs. PLDT Inc | Intouch Holdings vs. Sino Land |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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