Correlation Between Walmart and Gen III

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

Diversification Opportunities for Walmart and Gen III

-0.76

Correlation Coefficient

Walmart  Gen III

Pay attention - limited upside

The 3 months correlation between Walmart and Gen is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Gen III Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gen III Oil 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 Gen III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gen III Oil has no effect on the direction of Walmart i.e., Walmart and Gen III go up and down completely randomly.

Pair Corralation between Walmart and Gen III

Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 0.11 times more return on investment than Gen III. However, Walmart Inc CDR is 9.39 times less risky than Gen III. It trades about 0.68 of its potential returns per unit of risk. Gen III Oil is currently generating about 0.0 per unit of risk. If you would invest  3,220  in Walmart Inc CDR on June 18, 2024 and sell it today you would earn a total of  298.00  from holding Walmart Inc CDR or generate 9.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Walmart Inc CDR  vs.  Gen III Oil

Walmart Inc CDR

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart Inc CDR are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Walmart displayed solid returns over the last few months and may actually be approaching a breakup point.

Gen III Oil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gen III Oil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's forward indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Walmart and Gen III

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

The idea behind Walmart Inc CDR and Gen III Oil 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.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.