Correlation Between Walmart and Alliancebernstein
Can any of the company-specific risk be diversified away by investing in both Walmart and Alliancebernstein 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 Alliancebernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Alliancebernstein Global High, you can compare the effects of market volatilities on Walmart and Alliancebernstein 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 Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Alliancebernstein.
Diversification Opportunities for Walmart and Alliancebernstein
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and Alliancebernstein is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Alliancebernstein Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein 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 Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Walmart i.e., Walmart and Alliancebernstein go up and down completely randomly.
Pair Corralation between Walmart and Alliancebernstein
Considering the 90-day investment horizon Walmart is expected to generate 1.94 times more return on investment than Alliancebernstein. However, Walmart is 1.94 times more volatile than Alliancebernstein Global High. It trades about 0.16 of its potential returns per unit of risk. Alliancebernstein Global High is currently generating about 0.12 per unit of risk. If you would invest 4,987 in Walmart on August 31, 2024 and sell it today you would earn a total of 4,263 from holding Walmart or generate 85.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Alliancebernstein Global High
Performance |
| Timeline |
| Walmart |
| Alliancebernstein |
Walmart and Alliancebernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Alliancebernstein
The main advantage of trading using opposite Walmart and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Alliancebernstein 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 Alliancebernstein will offset losses from the drop in Alliancebernstein's long position.| Walmart vs. Dollar General | Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield | Walmart vs. Morningstar Unconstrained Allocation |
| Alliancebernstein vs. MFS Investment Grade | Alliancebernstein vs. Eaton Vance Municipal | Alliancebernstein vs. DTF Tax Free | Alliancebernstein vs. HUMANA 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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