Correlation Between Walmart and Mullen
Can any of the company-specific risk be diversified away by investing in both Walmart and Mullen 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 Mullen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart Inc CDR and Mullen Group, you can compare the effects of market volatilities on Walmart and Mullen 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 Mullen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Mullen.
Diversification Opportunities for Walmart and Mullen
Very good diversification
The 3 months correlation between Walmart and Mullen is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Mullen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Group 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 Inc CDR are associated (or correlated) with Mullen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mullen Group has no effect on the direction of Walmart i.e., Walmart and Mullen go up and down completely randomly.
Pair Corralation between Walmart and Mullen
Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 0.97 times more return on investment than Mullen. However, Walmart Inc CDR is 1.03 times less risky than Mullen. It trades about 0.13 of its potential returns per unit of risk. Mullen Group is currently generating about -0.12 per unit of risk. If you would invest 3,909 in Walmart Inc CDR on December 2, 2024 and sell it today you would earn a total of 362.00 from holding Walmart Inc CDR or generate 9.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Walmart Inc CDR vs. Mullen Group
Performance |
Timeline |
Walmart Inc CDR |
Mullen Group |
Walmart and Mullen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walmart and Mullen
The main advantage of trading using opposite Walmart and Mullen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Mullen 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 Mullen will offset losses from the drop in Mullen's long position.Walmart vs. Diamond Estates Wines | Walmart vs. Mako Mining Corp | Walmart vs. Flow Beverage Corp | Walmart vs. Calibre Mining Corp |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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