Correlation Between Walmart and Thunderstruck Resources
Can any of the company-specific risk be diversified away by investing in both Walmart and Thunderstruck 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 Thunderstruck Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Thunderstruck Resources, you can compare the effects of market volatilities on Walmart and Thunderstruck 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 Thunderstruck Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Thunderstruck Resources.
Diversification Opportunities for Walmart and Thunderstruck Resources
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and Thunderstruck is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Thunderstruck Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderstruck 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 Thunderstruck Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderstruck Resources has no effect on the direction of Walmart i.e., Walmart and Thunderstruck Resources go up and down completely randomly.
Pair Corralation between Walmart and Thunderstruck Resources
If you would invest 8,195 in Walmart on September 1, 2024 and sell it today you would earn a total of 1,055 from holding Walmart or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Walmart vs. Thunderstruck Resources
Performance |
| Timeline |
| Walmart |
| Thunderstruck Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and Thunderstruck Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Thunderstruck Resources
The main advantage of trading using opposite Walmart and Thunderstruck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Thunderstruck 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 Thunderstruck Resources will offset losses from the drop in Thunderstruck Resources' long position.| Walmart vs. Ingles Markets Incorporated | Walmart vs. Grocery Outlet Holding | Walmart vs. Ocado Group plc | Walmart vs. Sprouts Farmers Market |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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