Correlation Between Walmart and Athabasca Oil
Can any of the company-specific risk be diversified away by investing in both Walmart and Athabasca Oil 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 Athabasca Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Athabasca Oil Corp, you can compare the effects of market volatilities on Walmart and Athabasca Oil 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 Athabasca Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Athabasca Oil.
Diversification Opportunities for Walmart and Athabasca Oil
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and Athabasca is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Athabasca Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athabasca Oil Corp 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 Athabasca Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athabasca Oil Corp has no effect on the direction of Walmart i.e., Walmart and Athabasca Oil go up and down completely randomly.
Pair Corralation between Walmart and Athabasca Oil
Considering the 90-day investment horizon Walmart is expected to generate 0.52 times more return on investment than Athabasca Oil. However, Walmart is 1.91 times less risky than Athabasca Oil. It trades about 0.23 of its potential returns per unit of risk. Athabasca Oil Corp is currently generating about 0.09 per unit of risk. If you would invest 8,140 in Walmart on August 26, 2024 and sell it today you would earn a total of 904.00 from holding Walmart or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Athabasca Oil Corp
Performance |
| Timeline |
| Walmart |
| Athabasca Oil Corp |
Walmart and Athabasca Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Athabasca Oil
The main advantage of trading using opposite Walmart and Athabasca Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Athabasca Oil 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 Athabasca Oil will offset losses from the drop in Athabasca Oil'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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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