Correlation Between Walmart and Continental Resources
Can any of the company-specific risk be diversified away by investing in both Walmart and Continental Resources 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 Continental Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Continental Resources, you can compare the effects of market volatilities on Walmart and Continental Resources 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 Continental Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Continental Resources.
Diversification Opportunities for Walmart and Continental Resources
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and Continental is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Continental Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Resources 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 Continental Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Resources has no effect on the direction of Walmart i.e., Walmart and Continental Resources go up and down completely randomly.
Pair Corralation between Walmart and Continental Resources
If you would invest 4,987 in Walmart on August 31, 2024 and sell it today you would earn a total of 4,263 from holding Walmart or generate 85.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.27% |
| Values | Daily Returns |
Walmart vs. Continental Resources
Performance |
| Timeline |
| Walmart |
| Continental Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and Continental Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Continental Resources
The main advantage of trading using opposite Walmart and Continental Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Continental Resources 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 Continental Resources will offset losses from the drop in Continental Resources' long position.| Walmart vs. Dollar General | Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield | Walmart vs. Morningstar Unconstrained Allocation |
| Continental Resources vs. SunLink Health Systems | Continental Resources vs. Tradeweb Markets | Continental Resources vs. Asbury Automotive Group | Continental Resources vs. Advanced Micro Devices |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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