Correlation Between Walmart and ENBRIDGE
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By analyzing existing cross correlation between Walmart and ENBRIDGE INC 45, you can compare the effects of market volatilities on Walmart and ENBRIDGE 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 ENBRIDGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and ENBRIDGE.
Diversification Opportunities for Walmart and ENBRIDGE
Excellent diversification
The 3 months correlation between Walmart and ENBRIDGE is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and ENBRIDGE INC 45 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENBRIDGE INC 45 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 ENBRIDGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENBRIDGE INC 45 has no effect on the direction of Walmart i.e., Walmart and ENBRIDGE go up and down completely randomly.
Pair Corralation between Walmart and ENBRIDGE
Considering the 90-day investment horizon Walmart is expected to generate 57.72 times less return on investment than ENBRIDGE. But when comparing it to its historical volatility, Walmart is 100.5 times less risky than ENBRIDGE. It trades about 0.17 of its potential returns per unit of risk. ENBRIDGE INC 45 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8,441 in ENBRIDGE INC 45 on November 1, 2024 and sell it today you would earn a total of 186.00 from holding ENBRIDGE INC 45 or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 57.17% |
| Values | Daily Returns |
Walmart vs. ENBRIDGE INC 45
Performance |
| Timeline |
| Walmart |
| ENBRIDGE INC 45 |
Walmart and ENBRIDGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and ENBRIDGE
The main advantage of trading using opposite Walmart and ENBRIDGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, ENBRIDGE 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 ENBRIDGE will offset losses from the drop in ENBRIDGE's long position.The idea behind Walmart and ENBRIDGE INC 45 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ENBRIDGE vs. Cheniere Energy Partners | ENBRIDGE vs. Braemar Hotels Resorts | ENBRIDGE vs. Wingstop | ENBRIDGE vs. NRG Energy |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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