Correlation Between Walmart and Rite Aid
Can any of the company-specific risk be diversified away by investing in both Walmart and Rite Aid 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 Rite Aid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Rite Aid, you can compare the effects of market volatilities on Walmart and Rite Aid 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 Rite Aid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Rite Aid.
Diversification Opportunities for Walmart and Rite Aid
Pay attention - limited upside
The 3 months correlation between Walmart and Rite is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Rite Aid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rite Aid 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 Rite Aid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rite Aid has no effect on the direction of Walmart i.e., Walmart and Rite Aid go up and down completely randomly.
Pair Corralation between Walmart and Rite Aid
If you would invest 17.00 in Rite Aid on January 20, 2024 and sell it today you would earn a total of 0.00 from holding Rite Aid or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Walmart vs. Rite Aid
Performance |
| Timeline |
| Walmart |
| Rite Aid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and Rite Aid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Rite Aid
The main advantage of trading using opposite Walmart and Rite Aid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Rite Aid 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 Rite Aid will offset losses from the drop in Rite Aid's long position.| Walmart vs. Aquagold International | Walmart vs. Morningstar Unconstrained Allocation | Walmart vs. Thrivent High Yield | Walmart vs. Via Renewables |
| Rite Aid vs. PetMed Express | Rite Aid vs. High Tide | Rite Aid vs. China Jo Jo Drugstores | Rite Aid vs. Bimi International Medical |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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