Correlation Between Walmart and Bunzl Plc
Can any of the company-specific risk be diversified away by investing in both Walmart and Bunzl Plc 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 Bunzl Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Bunzl plc, you can compare the effects of market volatilities on Walmart and Bunzl Plc 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 Bunzl Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Bunzl Plc.
Diversification Opportunities for Walmart and Bunzl Plc
Excellent diversification
The 3 months correlation between Walmart and Bunzl is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Bunzl plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunzl plc 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 Bunzl Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunzl plc has no effect on the direction of Walmart i.e., Walmart and Bunzl Plc go up and down completely randomly.
Pair Corralation between Walmart and Bunzl Plc
Considering the 90-day investment horizon Walmart is expected to generate 0.9 times more return on investment than Bunzl Plc. However, Walmart is 1.11 times less risky than Bunzl Plc. It trades about 0.28 of its potential returns per unit of risk. Bunzl plc is currently generating about -0.1 per unit of risk. If you would invest 8,075 in Walmart on August 29, 2024 and sell it today you would earn a total of 1,056 from holding Walmart or generate 13.08% 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. Bunzl plc
Performance |
| Timeline |
| Walmart |
| Bunzl plc |
Walmart and Bunzl Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Bunzl Plc
The main advantage of trading using opposite Walmart and Bunzl Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Bunzl Plc 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 Bunzl Plc will offset losses from the drop in Bunzl Plc'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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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