Correlation Between Walmart and Omai Gold
Can any of the company-specific risk be diversified away by investing in both Walmart and Omai Gold 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 Omai Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Omai Gold Mines, you can compare the effects of market volatilities on Walmart and Omai Gold 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 Omai Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Omai Gold.
Diversification Opportunities for Walmart and Omai Gold
Significant diversification
The 3 months correlation between Walmart and Omai is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Omai Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omai Gold Mines 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 Omai Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omai Gold Mines has no effect on the direction of Walmart i.e., Walmart and Omai Gold go up and down completely randomly.
Pair Corralation between Walmart and Omai Gold
Considering the 90-day investment horizon Walmart is expected to generate 1.16 times less return on investment than Omai Gold. But when comparing it to its historical volatility, Walmart is 5.29 times less risky than Omai Gold. It trades about 0.25 of its potential returns per unit of risk. Omai Gold Mines is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Omai Gold Mines on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Omai Gold Mines or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Omai Gold Mines
Performance |
| Timeline |
| Walmart |
| Omai Gold Mines |
Walmart and Omai Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Omai Gold
The main advantage of trading using opposite Walmart and Omai Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Omai Gold 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 Omai Gold will offset losses from the drop in Omai Gold's long position.| Walmart vs. Ingles Markets Incorporated | Walmart vs. Grocery Outlet Holding | Walmart vs. Ocado Group plc | Walmart vs. Sprouts Farmers Market |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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