Correlation Between Walmart and AMERICAN
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By analyzing existing cross correlation between Walmart and AMERICAN HOMES 4, you can compare the effects of market volatilities on Walmart and AMERICAN 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 AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and AMERICAN.
Diversification Opportunities for Walmart and AMERICAN
Pay attention - limited upside
The 3 months correlation between Walmart and AMERICAN is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and AMERICAN HOMES 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN HOMES 4 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN HOMES 4 has no effect on the direction of Walmart i.e., Walmart and AMERICAN go up and down completely randomly.
Pair Corralation between Walmart and AMERICAN
Considering the 90-day investment horizon Walmart is expected to generate 1.55 times more return on investment than AMERICAN. However, Walmart is 1.55 times more volatile than AMERICAN HOMES 4. It trades about 0.54 of its potential returns per unit of risk. AMERICAN HOMES 4 is currently generating about -0.13 per unit of risk. 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 | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Walmart vs. AMERICAN HOMES 4
Performance |
| Timeline |
| Walmart |
| AMERICAN HOMES 4 |
Walmart and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and AMERICAN
The main advantage of trading using opposite Walmart and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's long position.| Walmart vs. Ingles Markets Incorporated | Walmart vs. Sendas Distribuidora SA | Walmart vs. Grocery Outlet Holding | Walmart vs. Ocado Group plc |
| AMERICAN vs. AEP TEX INC | AMERICAN vs. US BANK NATIONAL | AMERICAN vs. American Express | AMERICAN vs. Chevron Corp |
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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