Correlation Between Walmart and BTB Real
Can any of the company-specific risk be diversified away by investing in both Walmart and BTB Real 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 BTB Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and BTB Real Estate, you can compare the effects of market volatilities on Walmart and BTB Real 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 BTB Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and BTB Real.
Diversification Opportunities for Walmart and BTB Real
Very good diversification
The 3 months correlation between Walmart and BTB is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and BTB Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTB Real Estate 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 BTB Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTB Real Estate has no effect on the direction of Walmart i.e., Walmart and BTB Real go up and down completely randomly.
Pair Corralation between Walmart and BTB Real
Considering the 90-day investment horizon Walmart is expected to generate 1.7 times more return on investment than BTB Real. However, Walmart is 1.7 times more volatile than BTB Real Estate. It trades about 0.1 of its potential returns per unit of risk. BTB Real Estate is currently generating about -0.11 per unit of risk. If you would invest 9,035 in Walmart on October 23, 2024 and sell it today you would earn a total of 159.00 from holding Walmart or generate 1.76% 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. BTB Real Estate
Performance |
| Timeline |
| Walmart |
| BTB Real Estate |
Walmart and BTB Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and BTB Real
The main advantage of trading using opposite Walmart and BTB Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, BTB Real 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 BTB Real will offset losses from the drop in BTB Real's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| BTB Real vs. City Office | BTB Real vs. Vornado Realty Trust | BTB Real vs. Cousins Properties Incorporated | BTB Real vs. Highwoods Properties |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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