Correlation Between Walmart and NSTAR
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By analyzing existing cross correlation between Walmart and NSTAR ELEC 32, you can compare the effects of market volatilities on Walmart and NSTAR 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 NSTAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and NSTAR.
Diversification Opportunities for Walmart and NSTAR
Very good diversification
The 3 months correlation between Walmart and NSTAR is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and NSTAR ELEC 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTAR ELEC 32 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 NSTAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTAR ELEC 32 has no effect on the direction of Walmart i.e., Walmart and NSTAR go up and down completely randomly.
Pair Corralation between Walmart and NSTAR
Considering the 90-day investment horizon Walmart is expected to generate 1.84 times more return on investment than NSTAR. However, Walmart is 1.84 times more volatile than NSTAR ELEC 32. It trades about 0.13 of its potential returns per unit of risk. NSTAR ELEC 32 is currently generating about 0.01 per unit of risk. If you would invest 4,725 in Walmart on August 30, 2024 and sell it today you would earn a total of 4,463 from holding Walmart or generate 94.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.27% |
| Values | Daily Returns |
Walmart vs. NSTAR ELEC 32
Performance |
| Timeline |
| Walmart |
| NSTAR ELEC 32 |
Walmart and NSTAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and NSTAR
The main advantage of trading using opposite Walmart and NSTAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, NSTAR 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 NSTAR will offset losses from the drop in NSTAR's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| NSTAR vs. Burlington Stores | NSTAR vs. Hertz Global Holdings | NSTAR vs. HE Equipment Services | NSTAR vs. Ross Stores |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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