Correlation Between Walmart and Faraday Copper
Can any of the company-specific risk be diversified away by investing in both Walmart and Faraday Copper 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 Faraday Copper 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 Faraday Copper Corp, you can compare the effects of market volatilities on Walmart and Faraday Copper 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 Faraday Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Faraday Copper.
Diversification Opportunities for Walmart and Faraday Copper
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Faraday is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Faraday Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Faraday Copper 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 Faraday Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Faraday Copper Corp has no effect on the direction of Walmart i.e., Walmart and Faraday Copper go up and down completely randomly.
Pair Corralation between Walmart and Faraday Copper
Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 0.62 times more return on investment than Faraday Copper. However, Walmart Inc CDR is 1.61 times less risky than Faraday Copper. It trades about -0.08 of its potential returns per unit of risk. Faraday Copper Corp is currently generating about -0.1 per unit of risk. If you would invest 4,058 in Walmart Inc CDR on October 20, 2024 and sell it today you would lose (74.00) from holding Walmart Inc CDR or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart Inc CDR vs. Faraday Copper Corp
Performance |
| Timeline |
| Walmart Inc CDR |
| Faraday Copper Corp |
Walmart and Faraday Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Faraday Copper
The main advantage of trading using opposite Walmart and Faraday Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Faraday Copper 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 Faraday Copper will offset losses from the drop in Faraday Copper's long position.| Walmart vs. Calibre Mining Corp | Walmart vs. Datable Technology Corp | Walmart vs. InPlay Oil Corp | Walmart vs. Quipt Home Medical |
| Faraday Copper vs. Arizona Sonoran Copper | Faraday Copper vs. Filo Mining Corp | Faraday Copper vs. Marimaca 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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