Correlation Between Walmart and G2 Goldfields
Can any of the company-specific risk be diversified away by investing in both Walmart and G2 Goldfields 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 G2 Goldfields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and G2 Goldfields, you can compare the effects of market volatilities on Walmart and G2 Goldfields 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 G2 Goldfields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and G2 Goldfields.
Diversification Opportunities for Walmart and G2 Goldfields
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and GUYGF is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and G2 Goldfields in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G2 Goldfields 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 G2 Goldfields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G2 Goldfields has no effect on the direction of Walmart i.e., Walmart and G2 Goldfields go up and down completely randomly.
Pair Corralation between Walmart and G2 Goldfields
Considering the 90-day investment horizon Walmart is expected to generate 2.37 times less return on investment than G2 Goldfields. But when comparing it to its historical volatility, Walmart is 2.66 times less risky than G2 Goldfields. It trades about 0.1 of its potential returns per unit of risk. G2 Goldfields is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 68.00 in G2 Goldfields on January 11, 2025 and sell it today you would earn a total of 167.00 from holding G2 Goldfields or generate 245.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. G2 Goldfields
Performance |
| Timeline |
| Walmart |
| G2 Goldfields |
Walmart and G2 Goldfields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and G2 Goldfields
The main advantage of trading using opposite Walmart and G2 Goldfields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, G2 Goldfields 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 G2 Goldfields will offset losses from the drop in G2 Goldfields' 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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