Correlation Between Walmart and CHK Old
Can any of the company-specific risk be diversified away by investing in both Walmart and CHK Old 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 CHK Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and CHK Old, you can compare the effects of market volatilities on Walmart and CHK Old 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 CHK Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and CHK Old.
Diversification Opportunities for Walmart and CHK Old
Excellent diversification
The 3 months correlation between Walmart and CHK is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and CHK Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHK Old 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 CHK Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHK Old has no effect on the direction of Walmart i.e., Walmart and CHK Old go up and down completely randomly.
Pair Corralation between Walmart and CHK Old
If you would invest 9,035 in Walmart on October 24, 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 | Weak |
| Accuracy | 5.56% |
| Values | Daily Returns |
Walmart vs. CHK Old
Performance |
| Timeline |
| Walmart |
| CHK Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and CHK Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and CHK Old
The main advantage of trading using opposite Walmart and CHK Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, CHK Old 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 CHK Old will offset losses from the drop in CHK Old'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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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