Correlation Between Walmart and Goeasy
Can any of the company-specific risk be diversified away by investing in both Walmart and Goeasy 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 Goeasy 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 goeasy, you can compare the effects of market volatilities on Walmart and Goeasy 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 Goeasy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Goeasy.
Diversification Opportunities for Walmart and Goeasy
Excellent diversification
The 3 months correlation between Walmart and Goeasy is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and goeasy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on goeasy 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 Goeasy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of goeasy has no effect on the direction of Walmart i.e., Walmart and Goeasy go up and down completely randomly.
Pair Corralation between Walmart and Goeasy
Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 0.7 times more return on investment than Goeasy. However, Walmart Inc CDR is 1.43 times less risky than Goeasy. It trades about 0.35 of its potential returns per unit of risk. goeasy is currently generating about 0.07 per unit of risk. If you would invest 3,623 in Walmart Inc CDR on August 24, 2024 and sell it today you would earn a total of 312.00 from holding Walmart Inc CDR or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart Inc CDR vs. goeasy
Performance |
| Timeline |
| Walmart Inc CDR |
| goeasy |
Walmart and Goeasy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Goeasy
The main advantage of trading using opposite Walmart and Goeasy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Goeasy 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 Goeasy will offset losses from the drop in Goeasy's long position.| Walmart vs. Everyday People Financial | Walmart vs. Income Financial Trust | Walmart vs. Canso Credit Trust | Walmart vs. Definity Financial Corp |
| Goeasy vs. National Bank of | Goeasy vs. Gatos Silver | Goeasy vs. Canadian Imperial Bank | Goeasy vs. Everyday People Financial |
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
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |