Correlation Between Walmart and Goodness Growth
Can any of the company-specific risk be diversified away by investing in both Walmart and Goodness Growth 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 Goodness Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Goodness Growth Holdings, you can compare the effects of market volatilities on Walmart and Goodness Growth 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 Goodness Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Goodness Growth.
Diversification Opportunities for Walmart and Goodness Growth
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Goodness is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Goodness Growth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodness Growth Holdings 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 Goodness Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodness Growth Holdings has no effect on the direction of Walmart i.e., Walmart and Goodness Growth go up and down completely randomly.
Pair Corralation between Walmart and Goodness Growth
Considering the 90-day investment horizon Walmart is expected to generate 0.17 times more return on investment than Goodness Growth. However, Walmart is 6.01 times less risky than Goodness Growth. It trades about 0.4 of its potential returns per unit of risk. Goodness Growth Holdings is currently generating about -0.17 per unit of risk. 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 | 100.0% |
| Values | Daily Returns |
Walmart vs. Goodness Growth Holdings
Performance |
| Timeline |
| Walmart |
| Goodness Growth Holdings |
Walmart and Goodness Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Goodness Growth
The main advantage of trading using opposite Walmart and Goodness Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Goodness Growth 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 Goodness Growth will offset losses from the drop in Goodness Growth's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Goodness Growth vs. Verano Holdings Corp | Goodness Growth vs. Lowell Farms | Goodness Growth vs. Ascend Wellness Holdings | Goodness Growth vs. 4Front Ventures Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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