Correlation Between Walmart and National Capital
Can any of the company-specific risk be diversified away by investing in both Walmart and National Capital 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 National Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and National Capital Bank, you can compare the effects of market volatilities on Walmart and National Capital 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 National Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and National Capital.
Diversification Opportunities for Walmart and National Capital
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and National is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and National Capital Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Capital Bank 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 National Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Capital Bank has no effect on the direction of Walmart i.e., Walmart and National Capital go up and down completely randomly.
Pair Corralation between Walmart and National Capital
Considering the 90-day investment horizon Walmart is expected to generate 1.51 times more return on investment than National Capital. However, Walmart is 1.51 times more volatile than National Capital Bank. It trades about 0.46 of its potential returns per unit of risk. National Capital Bank is currently generating about 0.25 per unit of risk. If you would invest 9,000 in Walmart on November 3, 2024 and sell it today you would earn a total of 816.00 from holding Walmart or generate 9.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. National Capital Bank
Performance |
| Timeline |
| Walmart |
| National Capital Bank |
Walmart and National Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and National Capital
The main advantage of trading using opposite Walmart and National Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, National Capital 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 National Capital will offset losses from the drop in National Capital's long position.| Walmart vs. ProShares Russell Dividend | Walmart vs. United Rentals | Walmart vs. Kforce Inc | Walmart vs. The Ensign Group |
| National Capital vs. Delhi Bank Corp | National Capital vs. CCSB Financial Corp | National Capital vs. Bank of Utica | National Capital vs. BEO Bancorp |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |