Correlation Between Walmart and EDP -
Can any of the company-specific risk be diversified away by investing in both Walmart and EDP - 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 EDP - into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and EDP Energias, you can compare the effects of market volatilities on Walmart and EDP - 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 EDP -. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and EDP -.
Diversification Opportunities for Walmart and EDP -
Very good diversification
The 3 months correlation between Walmart and EDP is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and EDP Energias in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDP Energias 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 EDP -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDP Energias has no effect on the direction of Walmart i.e., Walmart and EDP - go up and down completely randomly.
Pair Corralation between Walmart and EDP -
Considering the 90-day investment horizon Walmart is expected to generate 0.36 times more return on investment than EDP -. However, Walmart is 2.8 times less risky than EDP -. It trades about 0.59 of its potential returns per unit of risk. EDP Energias is currently generating about -0.03 per unit of risk. If you would invest 9,180 in Walmart on November 9, 2024 and sell it today you would earn a total of 1,105 from holding Walmart or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. EDP Energias
Performance |
| Timeline |
| Walmart |
| EDP Energias |
Walmart and EDP - Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and EDP -
The main advantage of trading using opposite Walmart and EDP - positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, EDP - 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 EDP - will offset losses from the drop in EDP -'s long position.| Walmart vs. Great Western Minerals | Walmart vs. Enterprise Bancorp | Walmart vs. T Rowe Price | Walmart vs. Aviat Networks |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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