Correlation Between Walmart and Gold Terra
Can any of the company-specific risk be diversified away by investing in both Walmart and Gold Terra 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 Gold Terra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Gold Terra Resource, you can compare the effects of market volatilities on Walmart and Gold Terra 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 Gold Terra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Gold Terra.
Diversification Opportunities for Walmart and Gold Terra
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walmart and Gold is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Gold Terra Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Terra Resource 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 Gold Terra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Terra Resource has no effect on the direction of Walmart i.e., Walmart and Gold Terra go up and down completely randomly.
Pair Corralation between Walmart and Gold Terra
Considering the 90-day investment horizon Walmart is expected to generate 1.44 times less return on investment than Gold Terra. But when comparing it to its historical volatility, Walmart is 4.76 times less risky than Gold Terra. It trades about 0.28 of its potential returns per unit of risk. Gold Terra Resource is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3.70 in Gold Terra Resource on August 29, 2024 and sell it today you would earn a total of 0.50 from holding Gold Terra Resource or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Gold Terra Resource
Performance |
| Timeline |
| Walmart |
| Gold Terra Resource |
Walmart and Gold Terra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Gold Terra
The main advantage of trading using opposite Walmart and Gold Terra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Gold Terra 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 Gold Terra will offset losses from the drop in Gold Terra's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Gold Terra vs. Vertiv Holdings Co | Gold Terra vs. Nasdaq Inc | Gold Terra vs. McDonalds | Gold Terra vs. Walmart |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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