Correlation Between Walmart and Intact Financial
Can any of the company-specific risk be diversified away by investing in both Walmart and Intact Financial 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 Intact Financial 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 Intact Financial Corp, you can compare the effects of market volatilities on Walmart and Intact Financial 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 Intact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Intact Financial.
Diversification Opportunities for Walmart and Intact Financial
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walmart and Intact is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Intact Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intact Financial 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 Intact Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intact Financial Corp has no effect on the direction of Walmart i.e., Walmart and Intact Financial go up and down completely randomly.
Pair Corralation between Walmart and Intact Financial
Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 1.18 times more return on investment than Intact Financial. However, Walmart is 1.18 times more volatile than Intact Financial Corp. It trades about 0.15 of its potential returns per unit of risk. Intact Financial Corp is currently generating about 0.06 per unit of risk. If you would invest 2,057 in Walmart Inc CDR on September 1, 2024 and sell it today you would earn a total of 1,980 from holding Walmart Inc CDR or generate 96.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart Inc CDR vs. Intact Financial Corp
Performance |
| Timeline |
| Walmart Inc CDR |
| Intact Financial Corp |
Walmart and Intact Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Intact Financial
The main advantage of trading using opposite Walmart and Intact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Intact Financial 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 Intact Financial will offset losses from the drop in Intact Financial's long position.| Walmart vs. Amazon CDR | Walmart vs. Berkshire Hathaway CDR | Walmart vs. UnitedHealth Group CDR | Walmart vs. Apple Inc CDR |
| Intact Financial vs. Intact Financial Corp | Intact Financial vs. National Bank of | Intact Financial vs. Fairfax Financial Holdings | Intact Financial vs. Fairfax Financial Holdings |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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