Correlation Between Walmart and Container Store
Can any of the company-specific risk be diversified away by investing in both Walmart and Container Store 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 Container Store into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Container Store Group, you can compare the effects of market volatilities on Walmart and Container Store 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 Container Store. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Container Store.
Diversification Opportunities for Walmart and Container Store
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Container is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Container Store Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Container Store Group 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 Container Store. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Container Store Group has no effect on the direction of Walmart i.e., Walmart and Container Store go up and down completely randomly.
Pair Corralation between Walmart and Container Store
Considering the 90-day investment horizon Walmart is expected to generate 0.16 times more return on investment than Container Store. However, Walmart is 6.28 times less risky than Container Store. It trades about 0.53 of its potential returns per unit of risk. Container Store Group is currently generating about -0.25 per unit of risk. If you would invest 8,139 in Walmart on August 31, 2024 and sell it today you would earn a total of 1,049 from holding Walmart or generate 12.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Container Store Group
Performance |
| Timeline |
| Walmart |
| Container Store Group |
Walmart and Container Store Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Container Store
The main advantage of trading using opposite Walmart and Container Store positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Container Store 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 Container Store will offset losses from the drop in Container Store's long position.| Walmart vs. Dollar General | Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield | Walmart vs. Morningstar Unconstrained Allocation |
| Container Store vs. Target | Container Store vs. Lowes Companies | Container Store vs. Kohls Corp | Container Store vs. Walmart |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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