Correlation Between Walmart and Steward Covered
Can any of the company-specific risk be diversified away by investing in both Walmart and Steward Covered 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 Steward Covered into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Steward Ered Call, you can compare the effects of market volatilities on Walmart and Steward Covered 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 Steward Covered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Steward Covered.
Diversification Opportunities for Walmart and Steward Covered
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walmart and Steward is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Steward Ered Call in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Ered Call 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 Steward Covered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Ered Call has no effect on the direction of Walmart i.e., Walmart and Steward Covered go up and down completely randomly.
Pair Corralation between Walmart and Steward Covered
Considering the 90-day investment horizon Walmart is expected to under-perform the Steward Covered. In addition to that, Walmart is 4.04 times more volatile than Steward Ered Call. It trades about -0.09 of its total potential returns per unit of risk. Steward Ered Call is currently generating about -0.08 per unit of volatility. If you would invest 809.00 in Steward Ered Call on November 27, 2024 and sell it today you would lose (6.00) from holding Steward Ered Call or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Steward Ered Call
Performance |
| Timeline |
| Walmart |
| Steward Ered Call |
Walmart and Steward Covered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Steward Covered
The main advantage of trading using opposite Walmart and Steward Covered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Steward Covered 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 Steward Covered will offset losses from the drop in Steward Covered's long position.| Walmart vs. Target | Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield | Walmart vs. Morningstar Unconstrained Allocation |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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