Correlation Between Walmart and CAPITAL
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By analyzing existing cross correlation between Walmart and CAPITAL ONE FINL, you can compare the effects of market volatilities on Walmart and CAPITAL 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 CAPITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and CAPITAL.
Diversification Opportunities for Walmart and CAPITAL
Excellent diversification
The 3 months correlation between Walmart and CAPITAL is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and CAPITAL ONE FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAPITAL ONE FINL 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 CAPITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAPITAL ONE FINL has no effect on the direction of Walmart i.e., Walmart and CAPITAL go up and down completely randomly.
Pair Corralation between Walmart and CAPITAL
Considering the 90-day investment horizon Walmart is expected to generate 1.49 times more return on investment than CAPITAL. However, Walmart is 1.49 times more volatile than CAPITAL ONE FINL. It trades about 0.53 of its potential returns per unit of risk. CAPITAL ONE FINL is currently generating about -0.24 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 | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Walmart vs. CAPITAL ONE FINL
Performance |
| Timeline |
| Walmart |
| CAPITAL ONE FINL |
Walmart and CAPITAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and CAPITAL
The main advantage of trading using opposite Walmart and CAPITAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, CAPITAL 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 CAPITAL will offset losses from the drop in CAPITAL's long position.| Walmart vs. Dollar General | Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield | Walmart vs. Morningstar Unconstrained Allocation |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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