Correlation Between Walmart and Oppenheimer Russell
Can any of the company-specific risk be diversified away by investing in both Walmart and Oppenheimer Russell 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 Oppenheimer Russell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Oppenheimer Russell 1000, you can compare the effects of market volatilities on Walmart and Oppenheimer Russell 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 Oppenheimer Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Oppenheimer Russell.
Diversification Opportunities for Walmart and Oppenheimer Russell
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walmart and Oppenheimer is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Oppenheimer Russell 1000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Russell 1000 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 Oppenheimer Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Russell 1000 has no effect on the direction of Walmart i.e., Walmart and Oppenheimer Russell go up and down completely randomly.
Pair Corralation between Walmart and Oppenheimer Russell
Considering the 90-day investment horizon Walmart is expected to generate 1.2 times more return on investment than Oppenheimer Russell. However, Walmart is 1.2 times more volatile than Oppenheimer Russell 1000. It trades about 0.24 of its potential returns per unit of risk. Oppenheimer Russell 1000 is currently generating about 0.03 per unit of risk. If you would invest 6,486 in Walmart on August 25, 2024 and sell it today you would earn a total of 2,558 from holding Walmart or generate 39.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Oppenheimer Russell 1000
Performance |
| Timeline |
| Walmart |
| Oppenheimer Russell 1000 |
Walmart and Oppenheimer Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Oppenheimer Russell
The main advantage of trading using opposite Walmart and Oppenheimer Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Oppenheimer Russell 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 Oppenheimer Russell will offset losses from the drop in Oppenheimer Russell's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Oppenheimer Russell vs. Oppenheimer Russell 2000 | Oppenheimer Russell vs. Invesco SP 500 | Oppenheimer Russell vs. Invesco SP SmallCap | Oppenheimer Russell vs. Invesco SP MidCap |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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