Correlation Between Walmart and 1st Capital
Can any of the company-specific risk be diversified away by investing in both Walmart and 1st Capital 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 1st Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and 1st Capital Bank, you can compare the effects of market volatilities on Walmart and 1st Capital 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 1st Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and 1st Capital.
Diversification Opportunities for Walmart and 1st Capital
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walmart and 1st is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and 1st Capital Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1st Capital Bank 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 1st Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1st Capital Bank has no effect on the direction of Walmart i.e., Walmart and 1st Capital go up and down completely randomly.
Pair Corralation between Walmart and 1st Capital
If you would invest 8,195 in Walmart on September 1, 2024 and sell it today you would earn a total of 1,055 from holding Walmart or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Walmart vs. 1st Capital Bank
Performance |
| Timeline |
| Walmart |
| 1st Capital Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Strong
Walmart and 1st Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and 1st Capital
The main advantage of trading using opposite Walmart and 1st Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, 1st Capital 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 1st Capital will offset losses from the drop in 1st Capital's long position.| Walmart vs. Ingles Markets Incorporated | Walmart vs. Sendas Distribuidora SA | Walmart vs. Grocery Outlet Holding | Walmart vs. Ocado Group plc |
| 1st Capital vs. Pacific Valley Bank | 1st Capital vs. Pinnacle Bank | 1st Capital vs. Santa Cruz County | 1st Capital vs. First Northern Community |
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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