Correlation Between Walmart and Canadian Imperial
Can any of the company-specific risk be diversified away by investing in both Walmart and Canadian Imperial 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 Canadian Imperial 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 Canadian Imperial Bank, you can compare the effects of market volatilities on Walmart and Canadian Imperial 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 Canadian Imperial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Canadian Imperial.
Diversification Opportunities for Walmart and Canadian Imperial
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walmart and Canadian is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Canadian Imperial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Imperial Bank 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 Canadian Imperial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Imperial Bank has no effect on the direction of Walmart i.e., Walmart and Canadian Imperial go up and down completely randomly.
Pair Corralation between Walmart and Canadian Imperial
Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 1.22 times more return on investment than Canadian Imperial. However, Walmart is 1.22 times more volatile than Canadian Imperial Bank. It trades about 0.17 of its potential returns per unit of risk. Canadian Imperial Bank is currently generating about 0.11 per unit of risk. If you would invest 3,562 in Walmart Inc CDR on October 22, 2024 and sell it today you would earn a total of 422.00 from holding Walmart Inc CDR or generate 11.85% 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. Canadian Imperial Bank
Performance |
| Timeline |
| Walmart Inc CDR |
| Canadian Imperial Bank |
Walmart and Canadian Imperial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Canadian Imperial
The main advantage of trading using opposite Walmart and Canadian Imperial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Canadian Imperial 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 Canadian Imperial will offset losses from the drop in Canadian Imperial's long position.| Walmart vs. Sparx Technology | Walmart vs. Big Rock Brewery | Walmart vs. Chemtrade Logistics Income | Walmart vs. Exco Technologies Limited |
| Canadian Imperial vs. Bank of Montreal | Canadian Imperial vs. Bank of Nova | Canadian Imperial vs. Royal Bank of | Canadian Imperial vs. Toronto Dominion Bank |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |