Correlation Between Walmart and Coastal Capital
Can any of the company-specific risk be diversified away by investing in both Walmart and Coastal Capital 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 Coastal Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Coastal Capital Acq, you can compare the effects of market volatilities on Walmart and Coastal Capital 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 Coastal Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Coastal Capital.
Diversification Opportunities for Walmart and Coastal Capital
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and Coastal is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Coastal Capital Acq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Capital Acq 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 Coastal Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Capital Acq has no effect on the direction of Walmart i.e., Walmart and Coastal Capital go up and down completely randomly.
Pair Corralation between Walmart and Coastal Capital
Considering the 90-day investment horizon Walmart is expected to generate 3.39 times less return on investment than Coastal Capital. But when comparing it to its historical volatility, Walmart is 15.87 times less risky than Coastal Capital. It trades about 0.54 of its potential returns per unit of risk. Coastal Capital Acq is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 0.07 in Coastal Capital Acq on September 1, 2024 and sell it today you would earn a total of 0.01 from holding Coastal Capital Acq or generate 14.29% 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. Coastal Capital Acq
Performance |
| Timeline |
| Walmart |
| Coastal Capital Acq |
Walmart and Coastal Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Coastal Capital
The main advantage of trading using opposite Walmart and Coastal Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Coastal Capital 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 Coastal Capital will offset losses from the drop in Coastal Capital's long position.| Walmart vs. Ingles Markets Incorporated | Walmart vs. Grocery Outlet Holding | Walmart vs. Ocado Group plc | Walmart vs. Sprouts Farmers Market |
| Coastal Capital vs. American Leisure Holdings | Coastal Capital vs. Supurva Healthcare Group | Coastal Capital vs. China Health Management | Coastal Capital vs. Embrace Change Acquisition |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |