Correlation Between Gruppo MutuiOnline and Walmart

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

By analyzing existing cross correlation between Gruppo MutuiOnline SpA and Walmart, you can compare the effects of market volatilities on Gruppo MutuiOnline 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 Gruppo MutuiOnline with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gruppo MutuiOnline and Walmart.

Diversification Opportunities for Gruppo MutuiOnline and Walmart

-0.21

Correlation Coefficient

Gruppo MutuiOnline  Walmart

Very good diversification

The 3 months correlation between Gruppo and Walmart is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Gruppo MutuiOnline SpA and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Gruppo MutuiOnline 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 Gruppo MutuiOnline SpA 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 has no effect on the direction of Gruppo MutuiOnline i.e., Gruppo MutuiOnline and Walmart go up and down completely randomly.

Pair Corralation between Gruppo MutuiOnline and Walmart

Assuming the 90 days trading horizon Gruppo MutuiOnline SpA is expected to generate 45.22 times more return on investment than Walmart. However, Gruppo MutuiOnline is 45.22 times more volatile than Walmart. It trades about 0.01 of its potential returns per unit of risk. Walmart is currently generating about 0.13 per unit of risk. If you would invest  3,686  in Gruppo MutuiOnline SpA on December 24, 2024 and sell it today you would lose (1.00) from holding Gruppo MutuiOnline SpA or give up 0.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	53.23%
Values	Daily Returns

Gruppo MutuiOnline SpA  vs.  Walmart

Gruppo MutuiOnline SpA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gruppo MutuiOnline SpA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Gruppo MutuiOnline is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Walmart

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Walmart is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gruppo MutuiOnline and Walmart

The main advantage of trading using opposite Gruppo MutuiOnline and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gruppo MutuiOnline 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 Gruppo MutuiOnline SpA and Walmart 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.