Correlation Between Walmart and Tattooed Chef
Can any of the company-specific risk be diversified away by investing in both Walmart and Tattooed Chef 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 Tattooed Chef into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Tattooed Chef, you can compare the effects of market volatilities on Walmart and Tattooed Chef 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 Tattooed Chef. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Tattooed Chef.
Diversification Opportunities for Walmart and Tattooed Chef
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Tattooed is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Tattooed Chef in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tattooed Chef 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 Tattooed Chef. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tattooed Chef has no effect on the direction of Walmart i.e., Walmart and Tattooed Chef go up and down completely randomly.
Pair Corralation between Walmart and Tattooed Chef
If you would invest 8,275 in Walmart on August 28, 2024 and sell it today you would earn a total of 675.00 from holding Walmart or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Walmart vs. Tattooed Chef
Performance |
| Timeline |
| Walmart |
| Tattooed Chef |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and Tattooed Chef Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Tattooed Chef
The main advantage of trading using opposite Walmart and Tattooed Chef positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Tattooed Chef 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 Tattooed Chef will offset losses from the drop in Tattooed Chef's long position.| Walmart vs. Innovative Food Hldg | Walmart vs. Calavo Growers | Walmart vs. The Chefs Warehouse | Walmart vs. AMCON Distributing |
| Tattooed Chef vs. Kraft Heinz Co | Tattooed Chef vs. Hormel Foods | Tattooed Chef vs. Kellanova | Tattooed Chef vs. Blue Star Foods |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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