Correlation Between Walmart and Auckland International
Can any of the company-specific risk be diversified away by investing in both Walmart and Auckland International 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 Auckland International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Auckland International Airport, you can compare the effects of market volatilities on Walmart and Auckland International 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 Auckland International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Auckland International.
Diversification Opportunities for Walmart and Auckland International
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and Auckland is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Auckland International Airport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auckland International 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 Auckland International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auckland International has no effect on the direction of Walmart i.e., Walmart and Auckland International go up and down completely randomly.
Pair Corralation between Walmart and Auckland International
Considering the 90-day investment horizon Walmart is expected to generate 0.41 times more return on investment than Auckland International. However, Walmart is 2.43 times less risky than Auckland International. It trades about 0.4 of its potential returns per unit of risk. Auckland International Airport is currently generating about -0.03 per unit of risk. If you would invest 8,275 in Walmart on August 29, 2024 and sell it today you would earn a total of 856.00 from holding Walmart or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Auckland International Airport
Performance |
| Timeline |
| Walmart |
| Auckland International |
Walmart and Auckland International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Auckland International
The main advantage of trading using opposite Walmart and Auckland International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Auckland International 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 Auckland International will offset losses from the drop in Auckland International's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Auckland International vs. Aeroports de Paris | Auckland International vs. Aena SME SA | Auckland International vs. Aena SME SA | Auckland International vs. Airports of Thailand |
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 CEOs Directory module to screen CEOs from public companies around the world.
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