Correlation Between Walmart and First Wave
Can any of the company-specific risk be diversified away by investing in both Walmart and First Wave 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 First Wave into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and First Wave BioPharma, you can compare the effects of market volatilities on Walmart and First Wave 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 First Wave. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and First Wave.
Diversification Opportunities for Walmart and First Wave
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and First is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and First Wave BioPharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Wave BioPharma 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 First Wave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Wave BioPharma has no effect on the direction of Walmart i.e., Walmart and First Wave go up and down completely randomly.
Pair Corralation between Walmart and First Wave
If you would invest 8,275 in Walmart on August 29, 2024 and sell it today you would earn a total of 856.00 from holding Walmart or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Walmart vs. First Wave BioPharma
Performance |
| Timeline |
| Walmart |
| First Wave BioPharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and First Wave Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and First Wave
The main advantage of trading using opposite Walmart and First Wave positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, First Wave 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 First Wave will offset losses from the drop in First Wave's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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