Correlation Between Walmart and Alternative Credit
Can any of the company-specific risk be diversified away by investing in both Walmart and Alternative Credit 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 Alternative Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Alternative Credit Income, you can compare the effects of market volatilities on Walmart and Alternative Credit 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 Alternative Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Alternative Credit.
Diversification Opportunities for Walmart and Alternative Credit
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Alternative is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Alternative Credit Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternative Credit Income 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 Alternative Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternative Credit Income has no effect on the direction of Walmart i.e., Walmart and Alternative Credit go up and down completely randomly.
Pair Corralation between Walmart and Alternative Credit
Considering the 90-day investment horizon Walmart is expected to generate 18.0 times more return on investment than Alternative Credit. However, Walmart is 18.0 times more volatile than Alternative Credit Income. It trades about 0.59 of its potential returns per unit of risk. Alternative Credit Income is currently generating about 0.5 per unit of risk. If you would invest 9,180 in Walmart on November 9, 2024 and sell it today you would earn a total of 1,105 from holding Walmart or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 20.0% |
| Values | Daily Returns |
Walmart vs. Alternative Credit Income
Performance |
| Timeline |
| Walmart |
| Alternative Credit Income |
Risk-Adjusted Performance
Very Strong
Weak | Strong |
Walmart and Alternative Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Alternative Credit
The main advantage of trading using opposite Walmart and Alternative Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Alternative Credit 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 Alternative Credit will offset losses from the drop in Alternative Credit's long position.| Walmart vs. Great Western Minerals | Walmart vs. Enterprise Bancorp | Walmart vs. T Rowe Price | Walmart vs. Aviat Networks |
| Alternative Credit vs. Cohen Steers Real | Alternative Credit vs. Prudential Real Estate | Alternative Credit vs. Voya Real Estate | Alternative Credit vs. Nexpoint Real Estate |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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