Correlation Between Walmart and MAVEN WIRELESS
Can any of the company-specific risk be diversified away by investing in both Walmart and MAVEN WIRELESS 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 MAVEN WIRELESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and MAVEN WIRELESS SWEDEN, you can compare the effects of market volatilities on Walmart and MAVEN WIRELESS 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 MAVEN WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and MAVEN WIRELESS.
Diversification Opportunities for Walmart and MAVEN WIRELESS
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and MAVEN is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and MAVEN WIRELESS SWEDEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAVEN WIRELESS SWEDEN 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 MAVEN WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAVEN WIRELESS SWEDEN has no effect on the direction of Walmart i.e., Walmart and MAVEN WIRELESS go up and down completely randomly.
Pair Corralation between Walmart and MAVEN WIRELESS
Assuming the 90 days trading horizon Walmart is expected to generate 0.37 times more return on investment than MAVEN WIRELESS. However, Walmart is 2.74 times less risky than MAVEN WIRELESS. It trades about 0.12 of its potential returns per unit of risk. MAVEN WIRELESS SWEDEN is currently generating about -0.01 per unit of risk. If you would invest 4,661 in Walmart on August 24, 2024 and sell it today you would earn a total of 4,042 from holding Walmart or generate 86.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. MAVEN WIRELESS SWEDEN
Performance |
| Timeline |
| Walmart |
| MAVEN WIRELESS SWEDEN |
Walmart and MAVEN WIRELESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and MAVEN WIRELESS
The main advantage of trading using opposite Walmart and MAVEN WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, MAVEN WIRELESS 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 MAVEN WIRELESS will offset losses from the drop in MAVEN WIRELESS's long position.| Walmart vs. Walmart | Walmart vs. Superior Plus Corp | Walmart vs. NMI Holdings | Walmart vs. Origin Agritech |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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