Correlation Between Walmart and Alaska Energy
Can any of the company-specific risk be diversified away by investing in both Walmart and Alaska Energy 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 Alaska Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart Inc CDR and Alaska Energy Metals, you can compare the effects of market volatilities on Walmart and Alaska Energy 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 Alaska Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Alaska Energy.
Diversification Opportunities for Walmart and Alaska Energy
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Alaska is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Alaska Energy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Energy Metals 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 Inc CDR are associated (or correlated) with Alaska Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Energy Metals has no effect on the direction of Walmart i.e., Walmart and Alaska Energy go up and down completely randomly.
Pair Corralation between Walmart and Alaska Energy
Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 0.31 times more return on investment than Alaska Energy. However, Walmart Inc CDR is 3.27 times less risky than Alaska Energy. It trades about 0.53 of its potential returns per unit of risk. Alaska Energy Metals is currently generating about -0.07 per unit of risk. If you would invest 3,557 in Walmart Inc CDR on August 30, 2024 and sell it today you would earn a total of 489.00 from holding Walmart Inc CDR or generate 13.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart Inc CDR vs. Alaska Energy Metals
Performance |
| Timeline |
| Walmart Inc CDR |
| Alaska Energy Metals |
Walmart and Alaska Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Alaska Energy
The main advantage of trading using opposite Walmart and Alaska Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Alaska Energy 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 Alaska Energy will offset losses from the drop in Alaska Energy's long position.| Walmart vs. Alaska Energy Metals | Walmart vs. Chatham Rock Phosphate | Walmart vs. Elixxer | Walmart vs. Cielo Waste Solutions |
| Alaska Energy vs. First Majestic Silver | Alaska Energy vs. Ivanhoe Energy | Alaska Energy vs. Orezone Gold Corp | Alaska Energy vs. Faraday Copper Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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