Correlation Between Walmart and Calian Group
Can any of the company-specific risk be diversified away by investing in both Walmart and Calian 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 Calian Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Calian Group, you can compare the effects of market volatilities on Walmart and Calian 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 Calian Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Calian Group.
Diversification Opportunities for Walmart and Calian Group
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and Calian is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Calian Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calian Group 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 Calian Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calian Group has no effect on the direction of Walmart i.e., Walmart and Calian Group go up and down completely randomly.
Pair Corralation between Walmart and Calian Group
Considering the 90-day investment horizon Walmart is expected to generate 0.55 times more return on investment than Calian Group. However, Walmart is 1.82 times less risky than Calian Group. It trades about 0.22 of its potential returns per unit of risk. Calian Group is currently generating about -0.05 per unit of risk. If you would invest 5,121 in Walmart on August 26, 2024 and sell it today you would earn a total of 3,923 from holding Walmart or generate 76.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 52.61% |
| Values | Daily Returns |
Walmart vs. Calian Group
Performance |
| Timeline |
| Walmart |
| Calian Group |
Walmart and Calian Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Calian Group
The main advantage of trading using opposite Walmart and Calian Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Calian 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 Calian Group will offset losses from the drop in Calian Group's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Calian Group vs. Element Solutions | Calian Group vs. Orion Engineered Carbons | Calian Group vs. Minerals Technologies | Calian Group vs. Ingevity Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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