Correlation Between Walmart and Bertrandt

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

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

Diversification Opportunities for Walmart and Bertrandt

0.2

Correlation Coefficient

Walmart  Bertrandt

Modest diversification

The 3 months correlation between Walmart and Bertrandt is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Bertrandt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bertrandt AG 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 Bertrandt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bertrandt AG has no effect on the direction of Walmart i.e., Walmart and Bertrandt go up and down completely randomly.

Pair Corralation between Walmart and Bertrandt

Assuming the 90 days trading horizon Walmart is expected to generate 0.02 times more return on investment than Bertrandt. However, Walmart is 65.36 times less risky than Bertrandt. It trades about 0.13 of its potential returns per unit of risk. Bertrandt AG is currently generating about -0.03 per unit of risk. If you would invest  5,939  in Walmart on October 25, 2024 and sell it today you would earn a total of  21.00  from holding Walmart or generate 0.35% return on investment over 90 days.

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

Walmart  vs.  Bertrandt AG

Walmart

Risk-Adjusted Performance

10 of 100

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Bertrandt AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bertrandt AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bertrandt 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 Walmart and Bertrandt

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

The idea behind Walmart and Bertrandt AG 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.