Correlation Between Walmart and Victory Munder
Can any of the company-specific risk be diversified away by investing in both Walmart and Victory Munder 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 Victory Munder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Victory Munder Mid Cap, you can compare the effects of market volatilities on Walmart and Victory Munder 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 Victory Munder. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Victory Munder.
Diversification Opportunities for Walmart and Victory Munder
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walmart and Victory is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Victory Munder Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Munder Mid 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 Victory Munder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Munder Mid has no effect on the direction of Walmart i.e., Walmart and Victory Munder go up and down completely randomly.
Pair Corralation between Walmart and Victory Munder
Considering the 90-day investment horizon Walmart is expected to generate 1.12 times more return on investment than Victory Munder. However, Walmart is 1.12 times more volatile than Victory Munder Mid Cap. It trades about 0.39 of its potential returns per unit of risk. Victory Munder Mid Cap is currently generating about 0.27 per unit of risk. If you would invest 8,275 in Walmart on August 29, 2024 and sell it today you would earn a total of 856.00 from holding Walmart or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Victory Munder Mid Cap
Performance |
| Timeline |
| Walmart |
| Victory Munder Mid |
Walmart and Victory Munder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Victory Munder
The main advantage of trading using opposite Walmart and Victory Munder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Victory Munder 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 Victory Munder will offset losses from the drop in Victory Munder's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Victory Munder vs. Victory High Yield | Victory Munder vs. Calvert High Yield | Victory Munder vs. Siit High Yield | Victory Munder vs. Fidelity Capital Income |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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