Correlation Between Walmart and Hinto Energy
Can any of the company-specific risk be diversified away by investing in both Walmart and Hinto Energy 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 Hinto Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Hinto Energy, you can compare the effects of market volatilities on Walmart and Hinto Energy 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 Hinto Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Hinto Energy.
Diversification Opportunities for Walmart and Hinto Energy
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Hinto is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Hinto Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hinto Energy 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 Hinto Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hinto Energy has no effect on the direction of Walmart i.e., Walmart and Hinto Energy go up and down completely randomly.
Pair Corralation between Walmart and Hinto Energy
Considering the 90-day investment horizon Walmart is expected to generate 0.15 times more return on investment than Hinto Energy. However, Walmart is 6.63 times less risky than Hinto Energy. It trades about 0.53 of its potential returns per unit of risk. Hinto Energy is currently generating about -0.22 per unit of risk. If you would invest 8,245 in Walmart on September 3, 2024 and sell it today you would earn a total of 1,005 from holding Walmart or generate 12.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Walmart vs. Hinto Energy
Performance |
| Timeline |
| Walmart |
| Hinto Energy |
Walmart and Hinto Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Hinto Energy
The main advantage of trading using opposite Walmart and Hinto Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Hinto Energy 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 Hinto Energy will offset losses from the drop in Hinto Energy's long position.| Walmart vs. Partner Communications | Walmart vs. Merck Company | Walmart vs. Western Midstream Partners | Walmart vs. Edgewise Therapeutics |
| Hinto Energy vs. Gores Holdings IX | Hinto Energy vs. International Luxury Products | Hinto Energy vs. Cactus Acquisition 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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