Correlation Between Walmart and CINCINNATI
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By analyzing existing cross correlation between Walmart and CINCINNATI FINL P, you can compare the effects of market volatilities on Walmart and CINCINNATI 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 CINCINNATI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and CINCINNATI.
Diversification Opportunities for Walmart and CINCINNATI
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and CINCINNATI is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and CINCINNATI FINL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CINCINNATI FINL P 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 CINCINNATI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CINCINNATI FINL P has no effect on the direction of Walmart i.e., Walmart and CINCINNATI go up and down completely randomly.
Pair Corralation between Walmart and CINCINNATI
Considering the 90-day investment horizon Walmart is expected to generate 1.51 times more return on investment than CINCINNATI. However, Walmart is 1.51 times more volatile than CINCINNATI FINL P. It trades about 0.14 of its potential returns per unit of risk. CINCINNATI FINL P is currently generating about -0.01 per unit of risk. If you would invest 4,713 in Walmart on August 31, 2024 and sell it today you would earn a total of 4,475 from holding Walmart or generate 94.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 87.21% |
| Values | Daily Returns |
Walmart vs. CINCINNATI FINL P
Performance |
| Timeline |
| Walmart |
| CINCINNATI FINL P |
Walmart and CINCINNATI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and CINCINNATI
The main advantage of trading using opposite Walmart and CINCINNATI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, CINCINNATI 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 CINCINNATI will offset losses from the drop in CINCINNATI'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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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