Correlation Between Walmart and MCAN Mortgage
Can any of the company-specific risk be diversified away by investing in both Walmart and MCAN Mortgage 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 MCAN Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and MCAN Mortgage, you can compare the effects of market volatilities on Walmart and MCAN Mortgage 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 MCAN Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and MCAN Mortgage.
Diversification Opportunities for Walmart and MCAN Mortgage
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walmart and MCAN is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and MCAN Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCAN Mortgage 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 MCAN Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCAN Mortgage has no effect on the direction of Walmart i.e., Walmart and MCAN Mortgage go up and down completely randomly.
Pair Corralation between Walmart and MCAN Mortgage
Considering the 90-day investment horizon Walmart is expected to generate 0.52 times more return on investment than MCAN Mortgage. However, Walmart is 1.92 times less risky than MCAN Mortgage. It trades about 0.16 of its potential returns per unit of risk. MCAN Mortgage is currently generating about 0.07 per unit of risk. If you would invest 5,052 in Walmart on September 12, 2024 and sell it today you would earn a total of 4,403 from holding Walmart or generate 87.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 47.72% |
| Values | Daily Returns |
Walmart vs. MCAN Mortgage
Performance |
| Timeline |
| Walmart |
| MCAN Mortgage |
Walmart and MCAN Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and MCAN Mortgage
The main advantage of trading using opposite Walmart and MCAN Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, MCAN Mortgage 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 MCAN Mortgage will offset losses from the drop in MCAN Mortgage's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| MCAN Mortgage vs. Guild Holdings Co | MCAN Mortgage vs. Mr Cooper Group | MCAN Mortgage vs. Encore Capital Group | MCAN Mortgage vs. CNFinance Holdings |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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