Correlation Between Walmart and COLGATE
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By analyzing existing cross correlation between Walmart and COLGATE PALMOLIVE MEDIUM TERM, you can compare the effects of market volatilities on Walmart and COLGATE 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 COLGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and COLGATE.
Diversification Opportunities for Walmart and COLGATE
Excellent diversification
The 3 months correlation between Walmart and COLGATE is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and COLGATE PALMOLIVE MEDIUM TERM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLGATE PALMOLIVE 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 COLGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COLGATE PALMOLIVE has no effect on the direction of Walmart i.e., Walmart and COLGATE go up and down completely randomly.
Pair Corralation between Walmart and COLGATE
Considering the 90-day investment horizon Walmart is expected to generate 1.01 times more return on investment than COLGATE. However, Walmart is 1.01 times more volatile than COLGATE PALMOLIVE MEDIUM TERM. It trades about 0.26 of its potential returns per unit of risk. COLGATE PALMOLIVE MEDIUM TERM is currently generating about -0.1 per unit of risk. If you would invest 7,966 in Walmart on September 12, 2024 and sell it today you would earn a total of 1,530 from holding Walmart or generate 19.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 73.44% |
| Values | Daily Returns |
Walmart vs. COLGATE PALMOLIVE MEDIUM TERM
Performance |
| Timeline |
| Walmart |
| COLGATE PALMOLIVE |
Walmart and COLGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and COLGATE
The main advantage of trading using opposite Walmart and COLGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, COLGATE 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 COLGATE will offset losses from the drop in COLGATE's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| COLGATE vs. AEP TEX INC | COLGATE vs. US BANK NATIONAL | COLGATE vs. Applied Blockchain | COLGATE vs. BigBearai Holdings |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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