Correlation Between Walmart and Aris Gold
Can any of the company-specific risk be diversified away by investing in both Walmart and Aris Gold 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 Aris Gold 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 Aris Gold Corp, you can compare the effects of market volatilities on Walmart and Aris Gold 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 Aris Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Aris Gold.
Diversification Opportunities for Walmart and Aris Gold
Very good diversification
The 3 months correlation between Walmart and Aris is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Aris Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aris Gold Corp 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 Aris Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aris Gold Corp has no effect on the direction of Walmart i.e., Walmart and Aris Gold go up and down completely randomly.
Pair Corralation between Walmart and Aris Gold
Assuming the 90 days trading horizon Walmart is expected to generate 1.04 times less return on investment than Aris Gold. But when comparing it to its historical volatility, Walmart Inc CDR is 2.81 times less risky than Aris Gold. It trades about 0.13 of its potential returns per unit of risk. Aris Gold Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 338.00 in Aris Gold Corp on September 2, 2024 and sell it today you would earn a total of 201.00 from holding Aris Gold Corp or generate 59.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart Inc CDR vs. Aris Gold Corp
Performance |
| Timeline |
| Walmart Inc CDR |
| Aris Gold Corp |
Walmart and Aris Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Aris Gold
The main advantage of trading using opposite Walmart and Aris Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Aris Gold 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 Aris Gold will offset losses from the drop in Aris Gold's long position.| Walmart vs. Amazon CDR | Walmart vs. Berkshire Hathaway CDR | Walmart vs. UnitedHealth Group CDR | Walmart vs. Apple Inc CDR |
| Aris Gold vs. Calibre Mining Corp | Aris Gold vs. K92 Mining | Aris Gold vs. Equinox Gold Corp | Aris Gold vs. New Found Gold |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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