Correlation Between Walmart and OceanaGold
Can any of the company-specific risk be diversified away by investing in both Walmart and OceanaGold 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 OceanaGold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and OceanaGold, you can compare the effects of market volatilities on Walmart and OceanaGold 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 OceanaGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and OceanaGold.
Diversification Opportunities for Walmart and OceanaGold
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walmart and OceanaGold is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and OceanaGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanaGold 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 OceanaGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanaGold has no effect on the direction of Walmart i.e., Walmart and OceanaGold go up and down completely randomly.
Pair Corralation between Walmart and OceanaGold
Considering the 90-day investment horizon Walmart is expected to generate 0.35 times more return on investment than OceanaGold. However, Walmart is 2.9 times less risky than OceanaGold. It trades about 0.14 of its potential returns per unit of risk. OceanaGold is currently generating about 0.05 per unit of risk. If you would invest 4,665 in Walmart on September 12, 2024 and sell it today you would earn a total of 4,790 from holding Walmart or generate 102.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Walmart vs. OceanaGold
Performance |
| Timeline |
| Walmart |
| OceanaGold |
Walmart and OceanaGold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and OceanaGold
The main advantage of trading using opposite Walmart and OceanaGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, OceanaGold 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 OceanaGold will offset losses from the drop in OceanaGold's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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