Correlation Between Walmart and AGF Management
Can any of the company-specific risk be diversified away by investing in both Walmart and AGF Management 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 AGF Management 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 AGF Management Limited, you can compare the effects of market volatilities on Walmart and AGF Management 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 AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and AGF Management.
Diversification Opportunities for Walmart and AGF Management
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walmart and AGF is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management 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 AGF Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF Management has no effect on the direction of Walmart i.e., Walmart and AGF Management go up and down completely randomly.
Pair Corralation between Walmart and AGF Management
Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 0.71 times more return on investment than AGF Management. However, Walmart Inc CDR is 1.41 times less risky than AGF Management. It trades about 0.36 of its potential returns per unit of risk. AGF Management Limited is currently generating about 0.12 per unit of risk. If you would invest 3,617 in Walmart Inc CDR on August 25, 2024 and sell it today you would earn a total of 318.00 from holding Walmart Inc CDR or generate 8.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart Inc CDR vs. AGF Management Limited
Performance |
| Timeline |
| Walmart Inc CDR |
| AGF Management |
Walmart and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and AGF Management
The main advantage of trading using opposite Walmart and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, AGF Management 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 AGF Management will offset losses from the drop in AGF Management's long position.| Walmart vs. Everyday People Financial | Walmart vs. Income Financial Trust | Walmart vs. Canso Credit Trust | Walmart vs. Definity Financial Corp |
| AGF Management vs. Walmart Inc CDR | AGF Management vs. Amazon CDR | AGF Management vs. UPS CDR | AGF Management vs. HOME DEPOT CDR |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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