Correlation Between Walmart and ORACLE
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By analyzing existing cross correlation between Walmart and ORACLE P 65, you can compare the effects of market volatilities on Walmart and ORACLE 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 ORACLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and ORACLE.
Diversification Opportunities for Walmart and ORACLE
Excellent diversification
The 3 months correlation between Walmart and ORACLE is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and ORACLE P 65 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORACLE P 65 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 ORACLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORACLE P 65 has no effect on the direction of Walmart i.e., Walmart and ORACLE go up and down completely randomly.
Pair Corralation between Walmart and ORACLE
Considering the 90-day investment horizon Walmart is expected to generate 1.21 times more return on investment than ORACLE. However, Walmart is 1.21 times more volatile than ORACLE P 65. It trades about 0.59 of its potential returns per unit of risk. ORACLE P 65 is currently generating about -0.02 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 1,200 from holding Walmart or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Walmart vs. ORACLE P 65
Performance |
| Timeline |
| Walmart |
| ORACLE P 65 |
Walmart and ORACLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and ORACLE
The main advantage of trading using opposite Walmart and ORACLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, ORACLE 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 ORACLE will offset losses from the drop in ORACLE's long position.| Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield | Walmart vs. Morningstar Unconstrained Allocation | Walmart vs. Via Renewables |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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