Correlation Between Walmart and WELLS
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By analyzing existing cross correlation between Walmart and WELLS FARGO NEW, you can compare the effects of market volatilities on Walmart and WELLS 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 WELLS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and WELLS.
Diversification Opportunities for Walmart and WELLS
Excellent diversification
The 3 months correlation between Walmart and WELLS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and WELLS FARGO NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WELLS FARGO NEW 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 WELLS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WELLS FARGO NEW has no effect on the direction of Walmart i.e., Walmart and WELLS go up and down completely randomly.
Pair Corralation between Walmart and WELLS
Considering the 90-day investment horizon Walmart is expected to generate 51.03 times less return on investment than WELLS. But when comparing it to its historical volatility, Walmart is 90.22 times less risky than WELLS. It trades about 0.16 of its potential returns per unit of risk. WELLS FARGO NEW is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,997 in WELLS FARGO NEW on September 1, 2024 and sell it today you would earn a total of 280.00 from holding WELLS FARGO NEW or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 83.6% |
| Values | Daily Returns |
Walmart vs. WELLS FARGO NEW
Performance |
| Timeline |
| Walmart |
| WELLS FARGO NEW |
Walmart and WELLS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and WELLS
The main advantage of trading using opposite Walmart and WELLS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, WELLS 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 WELLS will offset losses from the drop in WELLS's long position.| Walmart vs. Ingles Markets Incorporated | Walmart vs. Sendas Distribuidora SA | Walmart vs. Grocery Outlet Holding | Walmart vs. Village Super Market |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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