Correlation Between Walmart and Kansai Electric
Can any of the company-specific risk be diversified away by investing in both Walmart and Kansai Electric 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 Kansai Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Kansai Electric Power, you can compare the effects of market volatilities on Walmart and Kansai Electric 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 Kansai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Kansai Electric.
Diversification Opportunities for Walmart and Kansai Electric
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Kansai is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Kansai Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kansai Electric Power 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 Kansai Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kansai Electric Power has no effect on the direction of Walmart i.e., Walmart and Kansai Electric go up and down completely randomly.
Pair Corralation between Walmart and Kansai Electric
Considering the 90-day investment horizon Walmart is expected to generate 1.84 times less return on investment than Kansai Electric. But when comparing it to its historical volatility, Walmart is 6.24 times less risky than Kansai Electric. It trades about 0.42 of its potential returns per unit of risk. Kansai Electric Power is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 520.00 in Kansai Electric Power on November 4, 2024 and sell it today you would earn a total of 62.00 from holding Kansai Electric Power or generate 11.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Kansai Electric Power
Performance |
| Timeline |
| Walmart |
| Kansai Electric Power |
Walmart and Kansai Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Kansai Electric
The main advantage of trading using opposite Walmart and Kansai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Kansai Electric 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 Kansai Electric will offset losses from the drop in Kansai Electric's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Kansai Electric vs. Wind Works Power | Kansai Electric vs. Alternus Energy Group | Kansai Electric vs. Mass Megawat Wind | Kansai Electric vs. Enlight Renewable Energy |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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