Correlation Between Walmart and Riocan REIT
Can any of the company-specific risk be diversified away by investing in both Walmart and Riocan REIT 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 Riocan REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Riocan REIT, you can compare the effects of market volatilities on Walmart and Riocan REIT 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 Riocan REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Riocan REIT.
Diversification Opportunities for Walmart and Riocan REIT
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and Riocan is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Riocan REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riocan REIT 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 Riocan REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riocan REIT has no effect on the direction of Walmart i.e., Walmart and Riocan REIT go up and down completely randomly.
Pair Corralation between Walmart and Riocan REIT
Considering the 90-day investment horizon Walmart is expected to generate 0.73 times more return on investment than Riocan REIT. However, Walmart is 1.36 times less risky than Riocan REIT. It trades about 0.16 of its potential returns per unit of risk. Riocan REIT is currently generating about 0.0 per unit of risk. If you would invest 5,017 in Walmart on September 1, 2024 and sell it today you would earn a total of 4,233 from holding Walmart or generate 84.37% 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. Riocan REIT
Performance |
| Timeline |
| Walmart |
| Riocan REIT |
Walmart and Riocan REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Riocan REIT
The main advantage of trading using opposite Walmart and Riocan REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Riocan REIT 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 Riocan REIT will offset losses from the drop in Riocan REIT's long position.| Walmart vs. Ingles Markets Incorporated | Walmart vs. Sendas Distribuidora SA | Walmart vs. Grocery Outlet Holding | Walmart vs. Village Super Market |
| Riocan REIT vs. Choice Properties Real | Riocan REIT vs. CT Real Estate | Riocan REIT vs. Firm Capital Property | Riocan REIT vs. Slate Grocery REIT |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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