Correlation Between Walmart and Franco Nevada
Can any of the company-specific risk be diversified away by investing in both Walmart and Franco Nevada 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 Franco Nevada 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 Franco Nevada, you can compare the effects of market volatilities on Walmart and Franco Nevada 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 Franco Nevada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Franco Nevada.
Diversification Opportunities for Walmart and Franco Nevada
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Walmart and Franco is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Franco Nevada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franco Nevada 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 Franco Nevada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franco Nevada has no effect on the direction of Walmart i.e., Walmart and Franco Nevada go up and down completely randomly.
Pair Corralation between Walmart and Franco Nevada
Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 0.66 times more return on investment than Franco Nevada. However, Walmart Inc CDR is 1.51 times less risky than Franco Nevada. It trades about 0.14 of its potential returns per unit of risk. Franco Nevada is currently generating about 0.02 per unit of risk. If you would invest 2,110 in Walmart Inc CDR on November 2, 2024 and sell it today you would earn a total of 2,165 from holding Walmart Inc CDR or generate 102.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart Inc CDR vs. Franco Nevada
Performance |
| Timeline |
| Walmart Inc CDR |
| Franco Nevada |
Walmart and Franco Nevada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Franco Nevada
The main advantage of trading using opposite Walmart and Franco Nevada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Franco Nevada 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 Franco Nevada will offset losses from the drop in Franco Nevada's long position.| Walmart vs. Bausch Health Companies | Walmart vs. Slate Grocery REIT | Walmart vs. Jamieson Wellness | Walmart vs. Nova Leap Health |
| Franco Nevada vs. Wheaton Precious Metals | Franco Nevada vs. Agnico Eagle Mines | Franco Nevada vs. Alamos Gold | Franco Nevada vs. Osisko Gold Ro |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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