Correlation Between Walmart and RMG Acquisition
Can any of the company-specific risk be diversified away by investing in both Walmart and RMG Acquisition 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 RMG Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and RMG Acquisition Corp, you can compare the effects of market volatilities on Walmart and RMG Acquisition 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 RMG Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and RMG Acquisition.
Diversification Opportunities for Walmart and RMG Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and RMG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and RMG Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RMG Acquisition Corp 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 RMG Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RMG Acquisition Corp has no effect on the direction of Walmart i.e., Walmart and RMG Acquisition go up and down completely randomly.
Pair Corralation between Walmart and RMG Acquisition
If you would invest 6,907 in Walmart on January 11, 2025 and sell it today you would earn a total of 2,373 from holding Walmart or generate 34.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Walmart vs. RMG Acquisition Corp
Performance |
| Timeline |
| Walmart |
| RMG Acquisition Corp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Walmart and RMG Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and RMG Acquisition
The main advantage of trading using opposite Walmart and RMG Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, RMG Acquisition 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 RMG Acquisition will offset losses from the drop in RMG Acquisition's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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