Correlation Between Walmart and AuraSource
Can any of the company-specific risk be diversified away by investing in both Walmart and AuraSource 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 AuraSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and AuraSource, you can compare the effects of market volatilities on Walmart and AuraSource 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 AuraSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and AuraSource.
Diversification Opportunities for Walmart and AuraSource
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and AuraSource is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and AuraSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AuraSource 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 AuraSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AuraSource has no effect on the direction of Walmart i.e., Walmart and AuraSource go up and down completely randomly.
Pair Corralation between Walmart and AuraSource
Considering the 90-day investment horizon Walmart is expected to generate 0.08 times more return on investment than AuraSource. However, Walmart is 12.85 times less risky than AuraSource. It trades about 0.15 of its potential returns per unit of risk. AuraSource is currently generating about -0.18 per unit of risk. If you would invest 4,780 in Walmart on November 9, 2024 and sell it today you would earn a total of 5,505 from holding Walmart or generate 115.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 26.57% |
| Values | Daily Returns |
Walmart vs. AuraSource
Performance |
| Timeline |
| Walmart |
| AuraSource |
Walmart and AuraSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and AuraSource
The main advantage of trading using opposite Walmart and AuraSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, AuraSource 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 AuraSource will offset losses from the drop in AuraSource's long position.| Walmart vs. Great Western Minerals | Walmart vs. Enterprise Bancorp | Walmart vs. T Rowe Price | Walmart vs. Aviat Networks |
| AuraSource vs. Energy of Minas | AuraSource vs. Canadian Utilities Limited | AuraSource vs. NorthWestern | AuraSource vs. Allete Inc |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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