Correlation Between Walmart and Airgain
Can any of the company-specific risk be diversified away by investing in both Walmart and Airgain 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 Airgain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Airgain, you can compare the effects of market volatilities on Walmart and Airgain 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 Airgain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Airgain.
Diversification Opportunities for Walmart and Airgain
Poor diversification
The 3 months correlation between Walmart and Airgain is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Airgain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airgain 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 Airgain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airgain has no effect on the direction of Walmart i.e., Walmart and Airgain go up and down completely randomly.
Pair Corralation between Walmart and Airgain
Considering the 90-day investment horizon Walmart is expected to generate 0.29 times more return on investment than Airgain. However, Walmart is 3.46 times less risky than Airgain. It trades about 0.28 of its potential returns per unit of risk. Airgain is currently generating about -0.02 per unit of risk. If you would invest 8,327 in Walmart on August 24, 2024 and sell it today you would earn a total of 512.00 from holding Walmart or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Airgain
Performance |
| Timeline |
| Walmart |
| Airgain |
Walmart and Airgain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Airgain
The main advantage of trading using opposite Walmart and Airgain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Airgain 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 Airgain will offset losses from the drop in Airgain's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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