Correlation Between Walmart and NEWFIELD
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By analyzing existing cross correlation between Walmart and NEWFIELD EXPL 5375, you can compare the effects of market volatilities on Walmart and NEWFIELD 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 NEWFIELD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and NEWFIELD.
Diversification Opportunities for Walmart and NEWFIELD
Excellent diversification
The 3 months correlation between Walmart and NEWFIELD is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and NEWFIELD EXPL 5375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWFIELD EXPL 5375 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 NEWFIELD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWFIELD EXPL 5375 has no effect on the direction of Walmart i.e., Walmart and NEWFIELD go up and down completely randomly.
Pair Corralation between Walmart and NEWFIELD
Considering the 90-day investment horizon Walmart is expected to generate 3.06 times more return on investment than NEWFIELD. However, Walmart is 3.06 times more volatile than NEWFIELD EXPL 5375. It trades about 0.55 of its potential returns per unit of risk. NEWFIELD EXPL 5375 is currently generating about 0.08 per unit of risk. If you would invest 8,245 in Walmart on September 5, 2024 and sell it today you would earn a total of 1,106 from holding Walmart or generate 13.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Walmart vs. NEWFIELD EXPL 5375
Performance |
| Timeline |
| Walmart |
| NEWFIELD EXPL 5375 |
Walmart and NEWFIELD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and NEWFIELD
The main advantage of trading using opposite Walmart and NEWFIELD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, NEWFIELD 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 NEWFIELD will offset losses from the drop in NEWFIELD's long position.| Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield | Walmart vs. Morningstar Unconstrained Allocation | Walmart vs. Via Renewables |
| NEWFIELD vs. The Travelers Companies | NEWFIELD vs. GE Aerospace | NEWFIELD vs. Walmart | NEWFIELD vs. Pfizer Inc |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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