Correlation Between Walmart and Thor Explorations
Can any of the company-specific risk be diversified away by investing in both Walmart and Thor Explorations 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 Thor Explorations 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 Thor Explorations, you can compare the effects of market volatilities on Walmart and Thor Explorations 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 Thor Explorations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Thor Explorations.
Diversification Opportunities for Walmart and Thor Explorations
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and Thor is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Thor Explorations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Explorations 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 Thor Explorations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Explorations has no effect on the direction of Walmart i.e., Walmart and Thor Explorations go up and down completely randomly.
Pair Corralation between Walmart and Thor Explorations
Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 0.34 times more return on investment than Thor Explorations. However, Walmart Inc CDR is 2.98 times less risky than Thor Explorations. It trades about 0.38 of its potential returns per unit of risk. Thor Explorations is currently generating about -0.07 per unit of risk. If you would invest 3,605 in Walmart Inc CDR on August 29, 2024 and sell it today you would earn a total of 369.00 from holding Walmart Inc CDR or generate 10.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart Inc CDR vs. Thor Explorations
Performance |
| Timeline |
| Walmart Inc CDR |
| Thor Explorations |
Walmart and Thor Explorations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Thor Explorations
The main advantage of trading using opposite Walmart and Thor Explorations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Thor Explorations 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 Thor Explorations will offset losses from the drop in Thor Explorations' long position.| Walmart vs. Nicola Mining | Walmart vs. Northstar Clean Technologies | Walmart vs. North American Construction | Walmart vs. Air Canada |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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