Correlation Between Walmart and RecruiterCom
Can any of the company-specific risk be diversified away by investing in both Walmart and RecruiterCom 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 RecruiterCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and RecruiterCom Group, you can compare the effects of market volatilities on Walmart and RecruiterCom 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 RecruiterCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and RecruiterCom.
Diversification Opportunities for Walmart and RecruiterCom
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walmart and RecruiterCom is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and RecruiterCom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RecruiterCom Group 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 RecruiterCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RecruiterCom Group has no effect on the direction of Walmart i.e., Walmart and RecruiterCom go up and down completely randomly.
Pair Corralation between Walmart and RecruiterCom
Considering the 90-day investment horizon Walmart is expected to generate 2.52 times less return on investment than RecruiterCom. But when comparing it to its historical volatility, Walmart is 5.39 times less risky than RecruiterCom. It trades about 0.24 of its potential returns per unit of risk. RecruiterCom Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 178.00 in RecruiterCom Group on August 29, 2024 and sell it today you would earn a total of 96.00 from holding RecruiterCom Group or generate 53.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 67.46% |
| Values | Daily Returns |
Walmart vs. RecruiterCom Group
Performance |
| Timeline |
| Walmart |
| RecruiterCom Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Walmart and RecruiterCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and RecruiterCom
The main advantage of trading using opposite Walmart and RecruiterCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, RecruiterCom 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 RecruiterCom will offset losses from the drop in RecruiterCom's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| RecruiterCom vs. The Caldwell Partners | RecruiterCom vs. Hire Technologies | RecruiterCom vs. Trucept | RecruiterCom vs. Randstad Holdings NV |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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