Correlation Between Walmart and AMAZON
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By analyzing existing cross correlation between Walmart and AMAZON INC 425, you can compare the effects of market volatilities on Walmart and AMAZON 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 AMAZON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and AMAZON.
Diversification Opportunities for Walmart and AMAZON
Very good diversification
The 3 months correlation between Walmart and AMAZON is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and AMAZON INC 425 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAZON INC 425 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 AMAZON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAZON INC 425 has no effect on the direction of Walmart i.e., Walmart and AMAZON go up and down completely randomly.
Pair Corralation between Walmart and AMAZON
Considering the 90-day investment horizon Walmart is expected to generate 0.87 times more return on investment than AMAZON. However, Walmart is 1.15 times less risky than AMAZON. It trades about 0.16 of its potential returns per unit of risk. AMAZON INC 425 is currently generating about 0.02 per unit of risk. If you would invest 5,161 in Walmart on September 12, 2024 and sell it today you would earn a total of 4,294 from holding Walmart or generate 83.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.43% |
| Values | Daily Returns |
Walmart vs. AMAZON INC 425
Performance |
| Timeline |
| Walmart |
| AMAZON INC 425 |
Walmart and AMAZON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and AMAZON
The main advantage of trading using opposite Walmart and AMAZON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, AMAZON 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 AMAZON will offset losses from the drop in AMAZON'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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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