Correlation Between Walmart and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both Walmart and Canadian Utilities 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 Utilities 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 Utilities Ltd, you can compare the effects of market volatilities on Walmart and Canadian Utilities 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 Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Canadian Utilities.
Diversification Opportunities for Walmart and Canadian Utilities
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and Canadian is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Canadian Utilities Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities 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 Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of Walmart i.e., Walmart and Canadian Utilities go up and down completely randomly.
Pair Corralation between Walmart and Canadian Utilities
Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 1.19 times more return on investment than Canadian Utilities. However, Walmart is 1.19 times more volatile than Canadian Utilities Ltd. It trades about 0.24 of its potential returns per unit of risk. Canadian Utilities Ltd is currently generating about 0.06 per unit of risk. If you would invest 2,876 in Walmart Inc CDR on September 1, 2024 and sell it today you would earn a total of 1,161 from holding Walmart Inc CDR or generate 40.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Walmart Inc CDR vs. Canadian Utilities Ltd
Performance |
| Timeline |
| Walmart Inc CDR |
| Canadian Utilities |
Walmart and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Canadian Utilities
The main advantage of trading using opposite Walmart and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Canadian Utilities 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 Utilities will offset losses from the drop in Canadian Utilities' long position.| Walmart vs. Amazon CDR | Walmart vs. Berkshire Hathaway CDR | Walmart vs. UnitedHealth Group CDR | Walmart vs. Apple Inc CDR |
| Canadian Utilities vs. Altair Resources | Canadian Utilities vs. Arizona Metals Corp | Canadian Utilities vs. DRI Healthcare Trust | Canadian Utilities vs. Talon Metals 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |