Correlation Between Walmart and IGO
Can any of the company-specific risk be diversified away by investing in both Walmart and IGO 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 IGO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and IGO Limited, you can compare the effects of market volatilities on Walmart and IGO 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 IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and IGO.
Diversification Opportunities for Walmart and IGO
Excellent diversification
The 3 months correlation between Walmart and IGO is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and IGO Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO Limited 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 IGO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGO Limited has no effect on the direction of Walmart i.e., Walmart and IGO go up and down completely randomly.
Pair Corralation between Walmart and IGO
Considering the 90-day investment horizon Walmart is expected to generate 0.34 times more return on investment than IGO. However, Walmart is 2.92 times less risky than IGO. It trades about 0.23 of its potential returns per unit of risk. IGO Limited is currently generating about -0.04 per unit of risk. If you would invest 5,330 in Walmart on November 9, 2024 and sell it today you would earn a total of 4,955 from holding Walmart or generate 92.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.52% |
| Values | Daily Returns |
Walmart vs. IGO Limited
Performance |
| Timeline |
| Walmart |
| IGO Limited |
Walmart and IGO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and IGO
The main advantage of trading using opposite Walmart and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, IGO 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 IGO will offset losses from the drop in IGO's long position.| Walmart vs. Great Western Minerals | Walmart vs. Enterprise Bancorp | Walmart vs. T Rowe Price | Walmart vs. Aviat Networks |
| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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