Correlation Between Walmart and Pan Global
Can any of the company-specific risk be diversified away by investing in both Walmart and Pan Global 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 Pan Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Pan Global Resources, you can compare the effects of market volatilities on Walmart and Pan Global 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 Pan Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Pan Global.
Diversification Opportunities for Walmart and Pan Global
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Pan is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Pan Global Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Global Resources 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 Pan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Global Resources has no effect on the direction of Walmart i.e., Walmart and Pan Global go up and down completely randomly.
Pair Corralation between Walmart and Pan Global
Considering the 90-day investment horizon Walmart is expected to generate 0.19 times more return on investment than Pan Global. However, Walmart is 5.33 times less risky than Pan Global. It trades about 0.2 of its potential returns per unit of risk. Pan Global Resources is currently generating about -0.03 per unit of risk. If you would invest 5,902 in Walmart on August 25, 2024 and sell it today you would earn a total of 3,142 from holding Walmart or generate 53.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Pan Global Resources
Performance |
| Timeline |
| Walmart |
| Pan Global Resources |
Walmart and Pan Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Pan Global
The main advantage of trading using opposite Walmart and Pan Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Pan Global 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 Pan Global will offset losses from the drop in Pan Global'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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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