Correlation Between Walmart and China New
Can any of the company-specific risk be diversified away by investing in both Walmart and China New 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 China New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and China New Energy, you can compare the effects of market volatilities on Walmart and China New 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 China New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and China New.
Diversification Opportunities for Walmart and China New
Very good diversification
The 3 months correlation between Walmart and China is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and China New Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China New 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 China New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China New Energy has no effect on the direction of Walmart i.e., Walmart and China New go up and down completely randomly.
Pair Corralation between Walmart and China New
If you would invest 0.50 in China New Energy on November 27, 2024 and sell it today you would earn a total of 0.00 from holding China New Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Walmart vs. China New Energy
Performance |
| Timeline |
| Walmart |
| China New Energy |
Walmart and China New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and China New
The main advantage of trading using opposite Walmart and China New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, China New 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 China New will offset losses from the drop in China New's long position.| Walmart vs. Target | Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield | Walmart vs. Morningstar Unconstrained Allocation |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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