Correlation Between Walmart and Robex Resources
Can any of the company-specific risk be diversified away by investing in both Walmart and Robex Resources 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 Robex Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Robex Resources, you can compare the effects of market volatilities on Walmart and Robex Resources 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 Robex Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Robex Resources.
Diversification Opportunities for Walmart and Robex Resources
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Robex is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Robex Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robex Resources 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 Robex Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robex Resources has no effect on the direction of Walmart i.e., Walmart and Robex Resources go up and down completely randomly.
Pair Corralation between Walmart and Robex Resources
Considering the 90-day investment horizon Walmart is expected to generate 503.55 times less return on investment than Robex Resources. But when comparing it to its historical volatility, Walmart is 240.0 times less risky than Robex Resources. It trades about 0.13 of its potential returns per unit of risk. Robex Resources is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Robex Resources on August 29, 2024 and sell it today you would earn a total of 141.00 from holding Robex Resources or generate 587.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 70.77% |
| Values | Daily Returns |
Walmart vs. Robex Resources
Performance |
| Timeline |
| Walmart |
| Robex Resources |
Walmart and Robex Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Robex Resources
The main advantage of trading using opposite Walmart and Robex Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Robex Resources 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 Robex Resources will offset losses from the drop in Robex Resources' 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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