Correlation Between Walmart and Yorbeau Resources

Can any of the company-specific risk be diversified away by investing in both Walmart and Yorbeau Resources 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 Yorbeau Resources 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 Yorbeau Resources, you can compare the effects of market volatilities on Walmart and Yorbeau Resources 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 Yorbeau Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Yorbeau Resources.

Diversification Opportunities for Walmart and Yorbeau Resources

-0.48

Correlation Coefficient

Walmart  Yorbeau Resources

Very good diversification

The 3 months correlation between Walmart and Yorbeau is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Yorbeau Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yorbeau Resources 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 Yorbeau Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yorbeau Resources has no effect on the direction of Walmart i.e., Walmart and Yorbeau Resources go up and down completely randomly.

Pair Corralation between Walmart and Yorbeau Resources

Assuming the 90 days trading horizon Walmart is expected to generate 2.04 times less return on investment than Yorbeau Resources. But when comparing it to its historical volatility, Walmart Inc CDR is 8.26 times less risky than Yorbeau Resources. It trades about 0.18 of its potential returns per unit of risk. Yorbeau Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Yorbeau Resources on October 1, 2024 and sell it today you would earn a total of  0.00  from holding Yorbeau Resources or generate 0.0% 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.  Yorbeau Resources

Walmart Inc CDR

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart Inc CDR are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Walmart may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Yorbeau Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yorbeau Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental drivers, Yorbeau Resources displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walmart and Yorbeau Resources

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

The idea behind Walmart Inc CDR and Yorbeau Resources 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.