Correlation Between Walmart and Hawesko Holding
Can any of the company-specific risk be diversified away by investing in both Walmart and Hawesko Holding 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 Hawesko Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Hawesko Holding AG, you can compare the effects of market volatilities on Walmart and Hawesko Holding 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 Hawesko Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Hawesko Holding.
Diversification Opportunities for Walmart and Hawesko Holding
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Hawesko is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Hawesko Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawesko Holding AG 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 Hawesko Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawesko Holding AG has no effect on the direction of Walmart i.e., Walmart and Hawesko Holding go up and down completely randomly.
Pair Corralation between Walmart and Hawesko Holding
Assuming the 90 days trading horizon Walmart is expected to generate 0.81 times more return on investment than Hawesko Holding. However, Walmart is 1.23 times less risky than Hawesko Holding. It trades about 0.42 of its potential returns per unit of risk. Hawesko Holding AG is currently generating about -0.25 per unit of risk. If you would invest 7,657 in Walmart on August 29, 2024 and sell it today you would earn a total of 1,014 from holding Walmart or generate 13.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Hawesko Holding AG
Performance |
| Timeline |
| Walmart |
| Hawesko Holding AG |
Walmart and Hawesko Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Hawesko Holding
The main advantage of trading using opposite Walmart and Hawesko Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Hawesko Holding 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 Hawesko Holding will offset losses from the drop in Hawesko Holding's long position.| Walmart vs. Superior Plus Corp | Walmart vs. NMI Holdings | Walmart vs. Origin Agritech | Walmart vs. SIVERS SEMICONDUCTORS AB |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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