Correlation Between Walmart and Sitka Gold
Can any of the company-specific risk be diversified away by investing in both Walmart and Sitka Gold 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 Sitka Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Sitka Gold Corp, you can compare the effects of market volatilities on Walmart and Sitka Gold 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 Sitka Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Sitka Gold.
Diversification Opportunities for Walmart and Sitka Gold
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and Sitka is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Sitka Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitka Gold 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 Sitka Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitka Gold Corp has no effect on the direction of Walmart i.e., Walmart and Sitka Gold go up and down completely randomly.
Pair Corralation between Walmart and Sitka Gold
Considering the 90-day investment horizon Walmart is expected to generate 4.85 times less return on investment than Sitka Gold. But when comparing it to its historical volatility, Walmart is 1.82 times less risky than Sitka Gold. It trades about 0.15 of its potential returns per unit of risk. Sitka Gold Corp is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 28.00 in Sitka Gold Corp on January 13, 2025 and sell it today you would earn a total of 15.00 from holding Sitka Gold Corp or generate 53.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Sitka Gold Corp
Performance |
| Timeline |
| Walmart |
| Sitka Gold Corp |
Walmart and Sitka Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Sitka Gold
The main advantage of trading using opposite Walmart and Sitka Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Sitka Gold 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 Sitka Gold will offset losses from the drop in Sitka Gold's 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 Stocks Directory module to find actively traded stocks across global markets.
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