Correlation Between Walmart and Peloton Minerals
Can any of the company-specific risk be diversified away by investing in both Walmart and Peloton Minerals 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 Peloton Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Peloton Minerals, you can compare the effects of market volatilities on Walmart and Peloton Minerals 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 Peloton Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Peloton Minerals.
Diversification Opportunities for Walmart and Peloton Minerals
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and Peloton is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Peloton Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peloton Minerals 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 Peloton Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peloton Minerals has no effect on the direction of Walmart i.e., Walmart and Peloton Minerals go up and down completely randomly.
Pair Corralation between Walmart and Peloton Minerals
Considering the 90-day investment horizon Walmart is expected to generate 1.43 times less return on investment than Peloton Minerals. But when comparing it to its historical volatility, Walmart is 7.35 times less risky than Peloton Minerals. It trades about 0.15 of its potential returns per unit of risk. Peloton Minerals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7.42 in Peloton Minerals on September 2, 2024 and sell it today you would lose (1.22) from holding Peloton Minerals or give up 16.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Walmart vs. Peloton Minerals
Performance |
| Timeline |
| Walmart |
| Peloton Minerals |
Walmart and Peloton Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Peloton Minerals
The main advantage of trading using opposite Walmart and Peloton Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Peloton Minerals 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 Peloton Minerals will offset losses from the drop in Peloton Minerals' 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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