Correlation Between Walmart and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Walmart and Federated Hermes 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 Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Federated Hermes Core, you can compare the effects of market volatilities on Walmart and Federated Hermes 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 Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Federated Hermes.
Diversification Opportunities for Walmart and Federated Hermes
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and Federated is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Federated Hermes Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Core 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 Federated Hermes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Hermes Core has no effect on the direction of Walmart i.e., Walmart and Federated Hermes go up and down completely randomly.
Pair Corralation between Walmart and Federated Hermes
If you would invest 5,116 in Walmart on September 12, 2024 and sell it today you would earn a total of 4,380 from holding Walmart or generate 85.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Walmart vs. Federated Hermes Core
Performance |
| Timeline |
| Walmart |
| Federated Hermes Core |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Federated Hermes
The main advantage of trading using opposite Walmart and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Federated Hermes 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 Federated Hermes will offset losses from the drop in Federated Hermes' long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Federated Hermes vs. Western Asset Diversified | Federated Hermes vs. Calvert Developed Market | Federated Hermes vs. Barings Emerging Markets | Federated Hermes vs. Aqr Long Short Equity |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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