Correlation Between Walmart and Mercato Partners
Can any of the company-specific risk be diversified away by investing in both Walmart and Mercato Partners 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 Mercato Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Mercato Partners Acquisition, you can compare the effects of market volatilities on Walmart and Mercato Partners 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 Mercato Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Mercato Partners.
Diversification Opportunities for Walmart and Mercato Partners
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and Mercato is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Mercato Partners Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercato Partners Acq 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 Mercato Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercato Partners Acq has no effect on the direction of Walmart i.e., Walmart and Mercato Partners go up and down completely randomly.
Pair Corralation between Walmart and Mercato Partners
If you would invest 8,251 in Walmart on August 26, 2024 and sell it today you would earn a total of 793.00 from holding Walmart or generate 9.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Walmart vs. Mercato Partners Acquisition
Performance |
| Timeline |
| Walmart |
| Mercato Partners Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and Mercato Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Mercato Partners
The main advantage of trading using opposite Walmart and Mercato Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Mercato Partners 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 Mercato Partners will offset losses from the drop in Mercato Partners' long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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