Correlation Between Walmart and Capital Group
Can any of the company-specific risk be diversified away by investing in both Walmart and Capital Group 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 Capital Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Capital Group International, you can compare the effects of market volatilities on Walmart and Capital Group 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 Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Capital Group.
Diversification Opportunities for Walmart and Capital Group
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and Capital is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Capital Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Intern 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 Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Intern has no effect on the direction of Walmart i.e., Walmart and Capital Group go up and down completely randomly.
Pair Corralation between Walmart and Capital Group
Considering the 90-day investment horizon Walmart is expected to generate 1.3 times more return on investment than Capital Group. However, Walmart is 1.3 times more volatile than Capital Group International. It trades about 0.41 of its potential returns per unit of risk. Capital Group International is currently generating about -0.18 per unit of risk. If you would invest 8,251 in Walmart on August 26, 2024 and sell it today you would earn a total of 793.00 from holding Walmart or generate 9.61% 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. Capital Group International
Performance |
| Timeline |
| Walmart |
| Capital Group Intern |
Walmart and Capital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Capital Group
The main advantage of trading using opposite Walmart and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group'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 Stocks Directory module to find actively traded stocks across global markets.
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