Correlation Between Walmart and HOSPITALITY
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By analyzing existing cross correlation between Walmart and HOSPITALITY PPTYS TR, you can compare the effects of market volatilities on Walmart and HOSPITALITY 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 HOSPITALITY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and HOSPITALITY.
Diversification Opportunities for Walmart and HOSPITALITY
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and HOSPITALITY is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and HOSPITALITY PPTYS TR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOSPITALITY PPTYS 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 HOSPITALITY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOSPITALITY PPTYS has no effect on the direction of Walmart i.e., Walmart and HOSPITALITY go up and down completely randomly.
Pair Corralation between Walmart and HOSPITALITY
Considering the 90-day investment horizon Walmart is expected to generate 27.67 times less return on investment than HOSPITALITY. But when comparing it to its historical volatility, Walmart is 62.38 times less risky than HOSPITALITY. It trades about 0.13 of its potential returns per unit of risk. HOSPITALITY PPTYS TR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,348 in HOSPITALITY PPTYS TR on September 2, 2024 and sell it today you would earn a total of 61.00 from holding HOSPITALITY PPTYS TR or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.77% |
| Values | Daily Returns |
Walmart vs. HOSPITALITY PPTYS TR
Performance |
| Timeline |
| Walmart |
| HOSPITALITY PPTYS |
Walmart and HOSPITALITY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and HOSPITALITY
The main advantage of trading using opposite Walmart and HOSPITALITY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, HOSPITALITY 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 HOSPITALITY will offset losses from the drop in HOSPITALITY's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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