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The dynamics of pairs trading: an in-depth analysis of Walmart and target
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| 2.68 MB | Adobe PDF |
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Orientador(es)
Resumo(s)
The aim of this paper is to examine the implementation of a pairs trading strategy for the two
retail companies Walmart and Target. For this purpose, a company valuation using a DCF and
Multiple Approach was performed, which shows a current overvaluation of Walmart and
undervaluation of Target. The pair was subsequently checked for the application of a mean reversion strategy using correlation and cointegration analyses. With a developed trading
strategy that would have provided a 100% return based on historical performance, it is
recommended to open a short position in Walmart and a long position in Target.
Descrição
Palavras-chave
Valuation Trading Financial markets Retail