Correlation Between Walmart and Vodafone Group
Can any of the company-specific risk be diversified away by investing in both Walmart and Vodafone Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Walmart and Vodafone Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Vodafone Group PLC, you can compare the effects of market volatilities on Walmart and Vodafone Group 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 Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Vodafone Group.
Diversification Opportunities for Walmart and Vodafone Group
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and Vodafone is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Vodafone Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodafone Group PLC 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 Vodafone Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodafone Group PLC has no effect on the direction of Walmart i.e., Walmart and Vodafone Group go up and down completely randomly.
Pair Corralation between Walmart and Vodafone Group
Considering the 90-day investment horizon Walmart is expected to generate 0.45 times more return on investment than Vodafone Group. However, Walmart is 2.2 times less risky than Vodafone Group. It trades about 0.36 of its potential returns per unit of risk. Vodafone Group PLC is currently generating about -0.23 per unit of risk. If you would invest 8,304 in Walmart on August 25, 2024 and sell it today you would earn a total of 740.00 from holding Walmart or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Walmart vs. Vodafone Group PLC
Performance |
| Timeline |
| Walmart |
| Vodafone Group PLC |
Walmart and Vodafone Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Vodafone Group
The main advantage of trading using opposite Walmart and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Vodafone Group 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 Vodafone Group will offset losses from the drop in Vodafone Group's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Vodafone Group vs. KDDI Corp | Vodafone Group vs. Amrica Mvil, SAB | Vodafone Group vs. Airtel Africa Plc | Vodafone Group vs. BCE Inc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |