Correlation Between Walmart and Klondike Gold
Can any of the company-specific risk be diversified away by investing in both Walmart and Klondike Gold 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 Klondike Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Klondike Gold Corp, you can compare the effects of market volatilities on Walmart and Klondike Gold 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 Klondike Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Klondike Gold.
Diversification Opportunities for Walmart and Klondike Gold
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Walmart and Klondike is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Klondike Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klondike Gold Corp 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 Klondike Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klondike Gold Corp has no effect on the direction of Walmart i.e., Walmart and Klondike Gold go up and down completely randomly.
Pair Corralation between Walmart and Klondike Gold
Considering the 90-day investment horizon Walmart is expected to generate 53.66 times less return on investment than Klondike Gold. But when comparing it to its historical volatility, Walmart is 3.35 times less risky than Klondike Gold. It trades about 0.02 of its potential returns per unit of risk. Klondike Gold Corp is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Klondike Gold Corp on November 28, 2024 and sell it today you would earn a total of 1.68 from holding Klondike Gold Corp or generate 42.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Klondike Gold Corp
Performance |
| Timeline |
| Walmart |
| Klondike Gold Corp |
Walmart and Klondike Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Klondike Gold
The main advantage of trading using opposite Walmart and Klondike Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Klondike Gold 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 Klondike Gold will offset losses from the drop in Klondike Gold'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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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