Correlation Between Walmart and Maritime Resources
Can any of the company-specific risk be diversified away by investing in both Walmart and Maritime Resources 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 Maritime Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Maritime Resources Corp, you can compare the effects of market volatilities on Walmart and Maritime Resources 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 Maritime Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Maritime Resources.
Diversification Opportunities for Walmart and Maritime Resources
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walmart and Maritime is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Maritime Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maritime Resources 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 Maritime Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maritime Resources Corp has no effect on the direction of Walmart i.e., Walmart and Maritime Resources go up and down completely randomly.
Pair Corralation between Walmart and Maritime Resources
Considering the 90-day investment horizon Walmart is expected to generate 5.32 times less return on investment than Maritime Resources. But when comparing it to its historical volatility, Walmart is 15.46 times less risky than Maritime Resources. It trades about 0.24 of its potential returns per unit of risk. Maritime Resources Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3.60 in Maritime Resources Corp on August 30, 2024 and sell it today you would earn a total of 0.40 from holding Maritime Resources Corp or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Maritime Resources Corp
Performance |
| Timeline |
| Walmart |
| Maritime Resources Corp |
Walmart and Maritime Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Maritime Resources
The main advantage of trading using opposite Walmart and Maritime Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Maritime Resources 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 Maritime Resources will offset losses from the drop in Maritime Resources' long position.| Walmart vs. Weis Markets | Walmart vs. Ingles Markets Incorporated | Walmart vs. Sendas Distribuidora SA | Walmart vs. Village Super Market |
| Maritime Resources vs. Vertiv Holdings Co | Maritime Resources vs. Nasdaq Inc | Maritime Resources vs. McDonalds | Maritime Resources vs. Walmart |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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