Correlation Between Walmart and Sendas Distribuidora
Can any of the company-specific risk be diversified away by investing in both Walmart and Sendas Distribuidora 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 Sendas Distribuidora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Sendas Distribuidora SA, you can compare the effects of market volatilities on Walmart and Sendas Distribuidora 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 Sendas Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Sendas Distribuidora.
Diversification Opportunities for Walmart and Sendas Distribuidora
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walmart and Sendas is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Sendas Distribuidora SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sendas Distribuidora 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 Sendas Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sendas Distribuidora has no effect on the direction of Walmart i.e., Walmart and Sendas Distribuidora go up and down completely randomly.
Pair Corralation between Walmart and Sendas Distribuidora
Considering the 90-day investment horizon Walmart is expected to generate 1.13 times more return on investment than Sendas Distribuidora. However, Walmart is 1.13 times more volatile than Sendas Distribuidora SA. It trades about 0.59 of its potential returns per unit of risk. Sendas Distribuidora SA is currently generating about -0.58 per unit of risk. If you would invest 9,180 in Walmart on November 9, 2024 and sell it today you would earn a total of 1,105 from holding Walmart or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 15.0% |
| Values | Daily Returns |
Walmart vs. Sendas Distribuidora SA
Performance |
| Timeline |
| Walmart |
| Sendas Distribuidora |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Walmart and Sendas Distribuidora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Sendas Distribuidora
The main advantage of trading using opposite Walmart and Sendas Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Sendas Distribuidora 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 Sendas Distribuidora will offset losses from the drop in Sendas Distribuidora's long position.| Walmart vs. Great Western Minerals | Walmart vs. Enterprise Bancorp | Walmart vs. T Rowe Price | Walmart vs. Aviat Networks |
| Sendas Distribuidora vs. Village Super Market | Sendas Distribuidora vs. Weis Markets | Sendas Distribuidora vs. Ingles Markets Incorporated | Sendas Distribuidora vs. Grocery Outlet Holding |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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