Correlation Between Walmart and Tudor Gold
Can any of the company-specific risk be diversified away by investing in both Walmart and Tudor Gold 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 Tudor Gold 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 Tudor Gold Corp, you can compare the effects of market volatilities on Walmart and Tudor Gold 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 Tudor Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Tudor Gold.
Diversification Opportunities for Walmart and Tudor Gold
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and Tudor is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Tudor Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tudor Gold 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 Tudor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tudor Gold Corp has no effect on the direction of Walmart i.e., Walmart and Tudor Gold go up and down completely randomly.
Pair Corralation between Walmart and Tudor Gold
Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 0.33 times more return on investment than Tudor Gold. However, Walmart Inc CDR is 3.07 times less risky than Tudor Gold. It trades about 0.23 of its potential returns per unit of risk. Tudor Gold Corp is currently generating about -0.04 per unit of risk. If you would invest 2,608 in Walmart Inc CDR on September 3, 2024 and sell it today you would earn a total of 1,429 from holding Walmart Inc CDR or generate 54.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart Inc CDR vs. Tudor Gold Corp
Performance |
| Timeline |
| Walmart Inc CDR |
| Tudor Gold Corp |
Walmart and Tudor Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Tudor Gold
The main advantage of trading using opposite Walmart and Tudor Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Tudor Gold 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 Tudor Gold will offset losses from the drop in Tudor Gold's long position.| Walmart vs. Xtract One Technologies | Walmart vs. Enduro Metals Corp | Walmart vs. Wishpond Technologies | Walmart vs. Arbor Metals Corp |
| Tudor Gold vs. Teuton Resources Corp | Tudor Gold vs. American Creek Resources | Tudor Gold vs. Freegold Ventures Limited | Tudor Gold vs. Dolly Varden Silver |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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