Correlation Between Walmart and Kiplin Metals
Can any of the company-specific risk be diversified away by investing in both Walmart and Kiplin Metals 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 Kiplin Metals 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 Kiplin Metals, you can compare the effects of market volatilities on Walmart and Kiplin Metals 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 Kiplin Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Kiplin Metals.
Diversification Opportunities for Walmart and Kiplin Metals
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Walmart and Kiplin is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Kiplin Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiplin Metals 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 Kiplin Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiplin Metals has no effect on the direction of Walmart i.e., Walmart and Kiplin Metals go up and down completely randomly.
Pair Corralation between Walmart and Kiplin Metals
Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 0.14 times more return on investment than Kiplin Metals. However, Walmart Inc CDR is 6.95 times less risky than Kiplin Metals. It trades about 0.23 of its potential returns per unit of risk. Kiplin Metals is currently generating about 0.0 per unit of risk. If you would invest 2,314 in Walmart Inc CDR on November 9, 2024 and sell it today you would earn a total of 2,141 from holding Walmart Inc CDR or generate 92.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.54% |
| Values | Daily Returns |
Walmart Inc CDR vs. Kiplin Metals
Performance |
| Timeline |
| Walmart Inc CDR |
| Kiplin Metals |
Walmart and Kiplin Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Kiplin Metals
The main advantage of trading using opposite Walmart and Kiplin Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Kiplin Metals 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 Kiplin Metals will offset losses from the drop in Kiplin Metals' long position.| Walmart vs. Canlan Ice Sports | Walmart vs. Pace Metals | Walmart vs. Sun Peak Metals | Walmart vs. Gfl Environmental Holdings |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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