Correlation Between Walmart and WALMART

Can any of the company-specific risk be diversified away by investing in both Walmart and WALMART 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 WALMART into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Walmart and WALMART INC 4, you can compare the effects of market volatilities on Walmart and WALMART 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 WALMART. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and WALMART.

Diversification Opportunities for Walmart and WALMART

-0.06

Correlation Coefficient

Walmart  WALMART

Good diversification

The 3 months correlation between Walmart and WALMART is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and WALMART INC 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WALMART INC 4 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 WALMART. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WALMART INC 4 has no effect on the direction of Walmart i.e., Walmart and WALMART go up and down completely randomly.

Pair Corralation between Walmart and WALMART

Considering the 90-day investment horizon Walmart is expected to generate 0.79 times more return on investment than WALMART. However, Walmart is 1.27 times less risky than WALMART. It trades about 0.14 of its potential returns per unit of risk. WALMART INC 4 is currently generating about -0.14 per unit of risk. If you would invest  5,842  in Walmart on February 18, 2024 and sell it today you would earn a total of  623.00  from holding Walmart or generate 10.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.43%
Values	Daily Returns

Walmart  vs.  WALMART INC 4

Walmart

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Walmart may actually be approaching a critical reversion point that can send shares even higher in June 2024.

WALMART INC 4

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WALMART INC 4 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for WALMART INC 4 investors.

Pair Trading with Walmart and WALMART

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

The idea behind Walmart and WALMART INC 4 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.