Correlation Between Walmart and Global X

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Can any of the company-specific risk be diversified away by investing in both Walmart and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Global X Funds, you can compare the effects of market volatilities on Walmart and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Global X.

Diversification Opportunities for Walmart and Global X

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Walmart and Global is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of Walmart i.e., Walmart and Global X go up and down completely randomly.

Pair Corralation between Walmart and Global X

Considering the 90-day investment horizon Walmart is expected to generate 1.56 times less return on investment than Global X. In addition to that, Walmart is 1.23 times more volatile than Global X Funds. It trades about 0.28 of its total potential returns per unit of risk. Global X Funds is currently generating about 0.54 per unit of volatility. If you would invest  2,835  in Global X Funds on December 29, 2023 and sell it today you would earn a total of  495.00  from holding Global X Funds or generate 17.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Walmart  vs.  Global X Funds

 Performance 
       Timeline  
Walmart 

Risk-Adjusted Performance

22 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.
Global X Funds 

Risk-Adjusted Performance

32 of 100

 
Low
 
High
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Global X Funds are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, Global X exhibited solid returns over the last few months and may actually be approaching a breakup point.

Walmart and Global X Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walmart and Global X

The main advantage of trading using opposite Walmart and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.
The idea behind Walmart and Global X Funds 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 CEOs Directory module to screen CEOs from public companies around the world.

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