Correlation Between Walmart and Sanatana Resources
Can any of the company-specific risk be diversified away by investing in both Walmart and Sanatana Resources 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 Sanatana Resources 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 Sanatana Resources, you can compare the effects of market volatilities on Walmart and Sanatana Resources 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 Sanatana Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Sanatana Resources.
Diversification Opportunities for Walmart and Sanatana Resources
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Sanatana is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Sanatana Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanatana Resources 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 Sanatana Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanatana Resources has no effect on the direction of Walmart i.e., Walmart and Sanatana Resources go up and down completely randomly.
Pair Corralation between Walmart and Sanatana Resources
Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 0.12 times more return on investment than Sanatana Resources. However, Walmart Inc CDR is 8.37 times less risky than Sanatana Resources. It trades about 0.39 of its potential returns per unit of risk. Sanatana Resources is currently generating about -0.11 per unit of risk. If you would invest 3,605 in Walmart Inc CDR on August 27, 2024 and sell it today you would earn a total of 330.00 from holding Walmart Inc CDR or generate 9.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart Inc CDR vs. Sanatana Resources
Performance |
| Timeline |
| Walmart Inc CDR |
| Sanatana Resources |
Walmart and Sanatana Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Sanatana Resources
The main advantage of trading using opposite Walmart and Sanatana Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Sanatana Resources 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 Sanatana Resources will offset losses from the drop in Sanatana Resources' long position.| Walmart vs. Ramp Metals | Walmart vs. Aya Gold Silver | Walmart vs. Lion One Metals | Walmart vs. Perseus Mining |
| Sanatana Resources vs. First Majestic Silver | Sanatana Resources vs. Ivanhoe Energy | Sanatana Resources vs. Orezone Gold Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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