Correlation Between Walmart and Bayport International
Can any of the company-specific risk be diversified away by investing in both Walmart and Bayport 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 Bayport International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Bayport International Holdings, you can compare the effects of market volatilities on Walmart and Bayport 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 Bayport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Bayport International.
Diversification Opportunities for Walmart and Bayport International
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Bayport is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Bayport International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayport 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 Bayport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayport International has no effect on the direction of Walmart i.e., Walmart and Bayport International go up and down completely randomly.
Pair Corralation between Walmart and Bayport International
Considering the 90-day investment horizon Walmart is expected to generate 0.21 times more return on investment than Bayport International. However, Walmart is 4.7 times less risky than Bayport International. It trades about 0.21 of its potential returns per unit of risk. Bayport International Holdings is currently generating about -0.01 per unit of risk. If you would invest 5,593 in Walmart on November 2, 2024 and sell it today you would earn a total of 4,223 from holding Walmart or generate 75.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Bayport International Holdings
Performance |
| Timeline |
| Walmart |
| Bayport International |
Walmart and Bayport International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Bayport International
The main advantage of trading using opposite Walmart and Bayport International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Bayport 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 Bayport International will offset losses from the drop in Bayport International's long position.| Walmart vs. ProShares Russell Dividend | Walmart vs. United Rentals | Walmart vs. Kforce Inc | Walmart vs. The Ensign Group |
| Bayport International vs. Hong Kong Land | Bayport International vs. Wharf Holdings | Bayport International vs. Holiday Island Holdings | Bayport International vs. Sun Hung Kai |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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