Correlation Between Walmart and 98385XAM8
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By analyzing existing cross correlation between Walmart and XTO ENERGY INC, you can compare the effects of market volatilities on Walmart and 98385XAM8 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 98385XAM8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and 98385XAM8.
Diversification Opportunities for Walmart and 98385XAM8
Very good diversification
The 3 months correlation between Walmart and 98385XAM8 is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and XTO ENERGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTO ENERGY 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 98385XAM8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTO ENERGY INC has no effect on the direction of Walmart i.e., Walmart and 98385XAM8 go up and down completely randomly.
Pair Corralation between Walmart and 98385XAM8
Considering the 90-day investment horizon Walmart is expected to generate 1.48 times more return on investment than 98385XAM8. However, Walmart is 1.48 times more volatile than XTO ENERGY INC. It trades about 0.25 of its potential returns per unit of risk. XTO ENERGY INC is currently generating about 0.04 per unit of risk. If you would invest 6,683 in Walmart on September 12, 2024 and sell it today you would earn a total of 2,772 from holding Walmart or generate 41.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 56.0% |
| Values | Daily Returns |
Walmart vs. XTO ENERGY INC
Performance |
| Timeline |
| Walmart |
| XTO ENERGY INC |
Walmart and 98385XAM8 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and 98385XAM8
The main advantage of trading using opposite Walmart and 98385XAM8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, 98385XAM8 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 98385XAM8 will offset losses from the drop in 98385XAM8's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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