Correlation Between Walmart and Greenway Technologies
Can any of the company-specific risk be diversified away by investing in both Walmart and Greenway Technologies 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 Greenway Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Greenway Technologies, you can compare the effects of market volatilities on Walmart and Greenway Technologies 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 Greenway Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Greenway Technologies.
Diversification Opportunities for Walmart and Greenway Technologies
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Walmart and Greenway is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Greenway Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenway Technologies 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 Greenway Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenway Technologies has no effect on the direction of Walmart i.e., Walmart and Greenway Technologies go up and down completely randomly.
Pair Corralation between Walmart and Greenway Technologies
Considering the 90-day investment horizon Walmart is expected to generate 25.93 times less return on investment than Greenway Technologies. But when comparing it to its historical volatility, Walmart is 12.41 times less risky than Greenway Technologies. It trades about 0.06 of its potential returns per unit of risk. Greenway Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3.50 in Greenway Technologies on December 3, 2024 and sell it today you would earn a total of 1.50 from holding Greenway Technologies or generate 42.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.39% |
Values | Daily Returns |
Walmart vs. Greenway Technologies
Performance |
Timeline |
Walmart |
Greenway Technologies |
Walmart and Greenway Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walmart and Greenway Technologies
The main advantage of trading using opposite Walmart and Greenway Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Greenway Technologies 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 Greenway Technologies will offset losses from the drop in Greenway Technologies' long position.Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield | Walmart vs. Morningstar Unconstrained Allocation | Walmart vs. Via Renewables |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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