Correlation Between Walmart and SolGold PLC
Can any of the company-specific risk be diversified away by investing in both Walmart and SolGold PLC 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 SolGold PLC 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 SolGold PLC, you can compare the effects of market volatilities on Walmart and SolGold PLC 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 SolGold PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and SolGold PLC.
Diversification Opportunities for Walmart and SolGold PLC
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walmart and SolGold is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and SolGold PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolGold PLC 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 SolGold PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolGold PLC has no effect on the direction of Walmart i.e., Walmart and SolGold PLC go up and down completely randomly.
Pair Corralation between Walmart and SolGold PLC
Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 0.43 times more return on investment than SolGold PLC. However, Walmart Inc CDR is 2.3 times less risky than SolGold PLC. It trades about 0.01 of its potential returns per unit of risk. SolGold PLC is currently generating about -0.2 per unit of risk. If you would invest 4,275 in Walmart Inc CDR on December 1, 2024 and sell it today you would lose (4.00) from holding Walmart Inc CDR or give up 0.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart Inc CDR vs. SolGold PLC
Performance |
| Timeline |
| Walmart Inc CDR |
| SolGold PLC |
Walmart and SolGold PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and SolGold PLC
The main advantage of trading using opposite Walmart and SolGold PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, SolGold PLC 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 SolGold PLC will offset losses from the drop in SolGold PLC's long position.| Walmart vs. Sparx Technology | Walmart vs. California Nanotechnologies Corp | Walmart vs. Theralase Technologies | Walmart vs. HIVE Blockchain Technologies |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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