Correlation Between Walmart and VERIZON
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By analyzing existing cross correlation between Walmart and VERIZON MUNICATIONS INC, you can compare the effects of market volatilities on Walmart and VERIZON 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 VERIZON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and VERIZON.
Diversification Opportunities for Walmart and VERIZON
Excellent diversification
The 3 months correlation between Walmart and VERIZON is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and VERIZON MUNICATIONS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VERIZON MUNICATIONS INC 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 VERIZON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VERIZON MUNICATIONS INC has no effect on the direction of Walmart i.e., Walmart and VERIZON go up and down completely randomly.
Pair Corralation between Walmart and VERIZON
Considering the 90-day investment horizon Walmart is expected to generate 12.86 times less return on investment than VERIZON. But when comparing it to its historical volatility, Walmart is 45.35 times less risky than VERIZON. It trades about 0.15 of its potential returns per unit of risk. VERIZON MUNICATIONS INC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,255 in VERIZON MUNICATIONS INC on August 27, 2024 and sell it today you would earn a total of 226.00 from holding VERIZON MUNICATIONS INC or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.56% |
| Values | Daily Returns |
Walmart vs. VERIZON MUNICATIONS INC
Performance |
| Timeline |
| Walmart |
| VERIZON MUNICATIONS INC |
Walmart and VERIZON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and VERIZON
The main advantage of trading using opposite Walmart and VERIZON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, VERIZON 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 VERIZON will offset losses from the drop in VERIZON's long position.| Walmart vs. Innovative Food Hldg | Walmart vs. Calavo Growers | Walmart vs. The Chefs Warehouse | Walmart vs. AMCON Distributing |
| VERIZON vs. Harmony Gold Mining | VERIZON vs. Apogee Enterprises | VERIZON vs. Eldorado Gold Corp | VERIZON vs. Braskem SA Class |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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