Correlation Between Wal Mart and Orbia Advance

Can any of the company-specific risk be diversified away by investing in both Wal Mart and Orbia Advance 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 Wal Mart and Orbia Advance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wal Mart de Mxico and Orbia Advance, you can compare the effects of market volatilities on Wal Mart and Orbia Advance 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 Wal Mart with a short position of Orbia Advance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wal Mart and Orbia Advance.

Diversification Opportunities for Wal Mart and Orbia Advance

-0.14

Correlation Coefficient

Wal Mart  Orbia Advance

Good diversification

The 3 months correlation between Wal and Orbia is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Wal Mart de Mxico and Orbia Advance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbia Advance and Wal Mart 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 Wal Mart de Mxico are associated (or correlated) with Orbia Advance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbia Advance has no effect on the direction of Wal Mart i.e., Wal Mart and Orbia Advance go up and down completely randomly.

Pair Corralation between Wal Mart and Orbia Advance

Assuming the 90 days trading horizon Wal Mart de Mxico is expected to generate 0.67 times more return on investment than Orbia Advance. However, Wal Mart de Mxico is 1.5 times less risky than Orbia Advance. It trades about 0.06 of its potential returns per unit of risk. Orbia Advance is currently generating about 0.04 per unit of risk. If you would invest  5,428  in Wal Mart de Mxico on December 30, 2024 and sell it today you would earn a total of  300.00  from holding Wal Mart de Mxico or generate 5.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Wal Mart de Mxico  vs.  Orbia Advance

Wal Mart de

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wal Mart de Mxico are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating essential indicators, Wal Mart may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Orbia Advance

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Orbia Advance are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Orbia Advance is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Wal Mart and Orbia Advance

The main advantage of trading using opposite Wal Mart and Orbia Advance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wal Mart position performs unexpectedly, Orbia Advance 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 Orbia Advance will offset losses from the drop in Orbia Advance's long position.

The idea behind Wal Mart de Mxico and Orbia Advance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.