Correlation Between Walmart and Bantek
Can any of the company-specific risk be diversified away by investing in both Walmart and Bantek 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 Bantek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Bantek Inc, you can compare the effects of market volatilities on Walmart and Bantek 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 Bantek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Bantek.
Diversification Opportunities for Walmart and Bantek
Very good diversification
The 3 months correlation between Walmart and Bantek is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Bantek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bantek Inc 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 Bantek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bantek Inc has no effect on the direction of Walmart i.e., Walmart and Bantek go up and down completely randomly.
Pair Corralation between Walmart and Bantek
Considering the 90-day investment horizon Walmart is expected to generate 8.79 times less return on investment than Bantek. But when comparing it to its historical volatility, Walmart is 19.07 times less risky than Bantek. It trades about 0.53 of its potential returns per unit of risk. Bantek Inc is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 0.12 in Bantek Inc on September 2, 2024 and sell it today you would earn a total of 0.11 from holding Bantek Inc or generate 91.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Bantek Inc
Performance |
| Timeline |
| Walmart |
| Bantek Inc |
Walmart and Bantek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Bantek
The main advantage of trading using opposite Walmart and Bantek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Bantek 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 Bantek will offset losses from the drop in Bantek'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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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