Correlation Between Walmart and Peak Bancorp
Can any of the company-specific risk be diversified away by investing in both Walmart and Peak Bancorp 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 Peak Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Peak Bancorp, you can compare the effects of market volatilities on Walmart and Peak Bancorp 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 Peak Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Peak Bancorp.
Diversification Opportunities for Walmart and Peak Bancorp
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Peak is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Peak Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peak Bancorp 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 Peak Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peak Bancorp has no effect on the direction of Walmart i.e., Walmart and Peak Bancorp go up and down completely randomly.
Pair Corralation between Walmart and Peak Bancorp
If you would invest 8,245 in Walmart on September 4, 2024 and sell it today you would earn a total of 1,019 from holding Walmart or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Walmart vs. Peak Bancorp
Performance |
| Timeline |
| Walmart |
| Peak Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and Peak Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Peak Bancorp
The main advantage of trading using opposite Walmart and Peak Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Peak Bancorp 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 Peak Bancorp will offset losses from the drop in Peak Bancorp's long position.| Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield | Walmart vs. Morningstar Unconstrained Allocation | Walmart vs. Via Renewables |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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