Correlation Between Walmart and Capstone Green
Can any of the company-specific risk be diversified away by investing in both Walmart and Capstone Green 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 Capstone Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Capstone Green Energy, you can compare the effects of market volatilities on Walmart and Capstone Green 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 Capstone Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Capstone Green.
Diversification Opportunities for Walmart and Capstone Green
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and Capstone is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Capstone Green Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Green Energy 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 Capstone Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Green Energy has no effect on the direction of Walmart i.e., Walmart and Capstone Green go up and down completely randomly.
Pair Corralation between Walmart and Capstone Green
If you would invest 5,949 in Walmart on September 3, 2024 and sell it today you would earn a total of 3,301 from holding Walmart or generate 55.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.68% |
| Values | Daily Returns |
Walmart vs. Capstone Green Energy
Performance |
| Timeline |
| Walmart |
| Capstone Green Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and Capstone Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Capstone Green
The main advantage of trading using opposite Walmart and Capstone Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Capstone Green 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 Capstone Green will offset losses from the drop in Capstone Green's long position.| Walmart vs. Partner Communications | Walmart vs. Merck Company | Walmart vs. Western Midstream Partners | Walmart vs. Edgewise Therapeutics |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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