Correlation Between Walmart and Green Shift
Can any of the company-specific risk be diversified away by investing in both Walmart and Green Shift 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 Green Shift into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Green Shift Commodities, you can compare the effects of market volatilities on Walmart and Green Shift 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 Green Shift. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Green Shift.
Diversification Opportunities for Walmart and Green Shift
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Green is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Green Shift Commodities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Shift Commodities 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 Green Shift. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Shift Commodities has no effect on the direction of Walmart i.e., Walmart and Green Shift go up and down completely randomly.
Pair Corralation between Walmart and Green Shift
Considering the 90-day investment horizon Walmart is expected to generate 2.55 times less return on investment than Green Shift. But when comparing it to its historical volatility, Walmart is 9.51 times less risky than Green Shift. It trades about 0.23 of its potential returns per unit of risk. Green Shift Commodities is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2.48 in Green Shift Commodities on September 3, 2024 and sell it today you would earn a total of 0.52 from holding Green Shift Commodities or generate 20.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.81% |
| Values | Daily Returns |
Walmart vs. Green Shift Commodities
Performance |
| Timeline |
| Walmart |
| Green Shift Commodities |
Walmart and Green Shift Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Green Shift
The main advantage of trading using opposite Walmart and Green Shift positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Green Shift 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 Green Shift will offset losses from the drop in Green Shift's long position.| Walmart vs. Partner Communications | Walmart vs. Merck Company | Walmart vs. Western Midstream Partners | Walmart vs. Edgewise Therapeutics |
| Green Shift vs. Asure Software | Green Shift vs. Mattel Inc | Green Shift vs. Addus HomeCare | Green Shift vs. Xponential Fitness |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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