Correlation Between Walmart and JNC Resources
Can any of the company-specific risk be diversified away by investing in both Walmart and JNC Resources 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 JNC Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and JNC Resources, you can compare the effects of market volatilities on Walmart and JNC Resources 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 JNC Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and JNC Resources.
Diversification Opportunities for Walmart and JNC Resources
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walmart and JNC is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and JNC Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JNC Resources 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 JNC Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JNC Resources has no effect on the direction of Walmart i.e., Walmart and JNC Resources go up and down completely randomly.
Pair Corralation between Walmart and JNC Resources
Considering the 90-day investment horizon Walmart is expected to generate 29.97 times less return on investment than JNC Resources. But when comparing it to its historical volatility, Walmart is 45.42 times less risky than JNC Resources. It trades about 0.15 of its potential returns per unit of risk. JNC Resources is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3.10 in JNC Resources on September 1, 2024 and sell it today you would lose (0.60) from holding JNC Resources or give up 19.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Walmart vs. JNC Resources
Performance |
| Timeline |
| Walmart |
| JNC Resources |
Walmart and JNC Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and JNC Resources
The main advantage of trading using opposite Walmart and JNC Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, JNC Resources 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 JNC Resources will offset losses from the drop in JNC Resources' long position.| Walmart vs. Ingles Markets Incorporated | Walmart vs. Sendas Distribuidora SA | Walmart vs. Grocery Outlet Holding | Walmart vs. Ocado Group plc |
| JNC Resources vs. Aurion Resources | JNC Resources vs. Rio2 Limited | JNC Resources vs. Palamina Corp | JNC Resources vs. BTU Metals 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 CEOs Directory module to screen CEOs from public companies around the world.
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