Correlation Between Walmart and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both Walmart and Origin Agritech 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 Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Origin Agritech, you can compare the effects of market volatilities on Walmart and Origin Agritech 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 Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Origin Agritech.
Diversification Opportunities for Walmart and Origin Agritech
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walmart and Origin is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech 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 are associated (or correlated) with Origin Agritech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Agritech has no effect on the direction of Walmart i.e., Walmart and Origin Agritech go up and down completely randomly.
Pair Corralation between Walmart and Origin Agritech
Assuming the 90 days trading horizon Walmart is expected to generate 0.28 times more return on investment than Origin Agritech. However, Walmart is 3.58 times less risky than Origin Agritech. It trades about 0.46 of its potential returns per unit of risk. Origin Agritech is currently generating about 0.01 per unit of risk. If you would invest 7,935 in Walmart on September 12, 2024 and sell it today you would earn a total of 1,106 from holding Walmart or generate 13.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Origin Agritech
Performance |
| Timeline |
| Walmart |
| Origin Agritech |
Walmart and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Origin Agritech
The main advantage of trading using opposite Walmart and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Origin Agritech 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 Origin Agritech will offset losses from the drop in Origin Agritech's long position.| Walmart vs. IMPERIAL TOBACCO | Walmart vs. SCANDMEDICAL SOLDK 040 | Walmart vs. Scandinavian Tobacco Group | Walmart vs. Clearside Biomedical |
| Origin Agritech vs. REINET INVESTMENTS SCA | Origin Agritech vs. AOYAMA TRADING | Origin Agritech vs. Japan Asia Investment | Origin Agritech vs. MAROC TELECOM |
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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