Correlation Between Walmart and Orezone Gold
Can any of the company-specific risk be diversified away by investing in both Walmart and Orezone 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 Orezone Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Orezone Gold Corp, you can compare the effects of market volatilities on Walmart and Orezone 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 Orezone Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Orezone Gold.
Diversification Opportunities for Walmart and Orezone Gold
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and Orezone is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Orezone Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orezone Gold 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 Orezone Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orezone Gold Corp has no effect on the direction of Walmart i.e., Walmart and Orezone Gold go up and down completely randomly.
Pair Corralation between Walmart and Orezone Gold
Considering the 90-day investment horizon Walmart is expected to generate 0.3 times more return on investment than Orezone Gold. However, Walmart is 3.33 times less risky than Orezone Gold. It trades about 0.13 of its potential returns per unit of risk. Orezone Gold Corp is currently generating about -0.02 per unit of risk. If you would invest 4,830 in Walmart on August 28, 2024 and sell it today you would earn a total of 4,301 from holding Walmart or generate 89.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Orezone Gold Corp
Performance |
| Timeline |
| Walmart |
| Orezone Gold Corp |
Walmart and Orezone Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Orezone Gold
The main advantage of trading using opposite Walmart and Orezone Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Orezone 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 Orezone Gold will offset losses from the drop in Orezone Gold's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Orezone Gold vs. Aurion Resources | Orezone Gold vs. Minera Alamos | Orezone Gold vs. Rio2 Limited | Orezone Gold vs. Roscan Gold Corp |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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