Correlation Between Walmart and IAnthus Capital
Can any of the company-specific risk be diversified away by investing in both Walmart and IAnthus Capital 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 IAnthus Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and iAnthus Capital Holdings, you can compare the effects of market volatilities on Walmart and IAnthus Capital 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 IAnthus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and IAnthus Capital.
Diversification Opportunities for Walmart and IAnthus Capital
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and IAnthus is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and iAnthus Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iAnthus Capital Holdings 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 IAnthus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iAnthus Capital Holdings has no effect on the direction of Walmart i.e., Walmart and IAnthus Capital go up and down completely randomly.
Pair Corralation between Walmart and IAnthus Capital
Considering the 90-day investment horizon Walmart is expected to generate 0.21 times more return on investment than IAnthus Capital. However, Walmart is 4.83 times less risky than IAnthus Capital. It trades about 0.54 of its potential returns per unit of risk. iAnthus Capital Holdings is currently generating about -0.54 per unit of risk. If you would invest 8,195 in Walmart on September 1, 2024 and sell it today you would earn a total of 1,055 from holding Walmart or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. iAnthus Capital Holdings
Performance |
| Timeline |
| Walmart |
| iAnthus Capital Holdings |
Walmart and IAnthus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and IAnthus Capital
The main advantage of trading using opposite Walmart and IAnthus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, IAnthus Capital 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 IAnthus Capital will offset losses from the drop in IAnthus Capital's long position.| Walmart vs. Weis Markets | Walmart vs. Ingles Markets Incorporated | Walmart vs. Sendas Distribuidora SA | Walmart vs. Grocery Outlet Holding |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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