Correlation Between Walmart and St Galler

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

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

Diversification Opportunities for Walmart and St Galler

0.0

Correlation Coefficient

Walmart  St Galler

Pay attention - limited upside

The 3 months correlation between Walmart and 0QQZ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and St Galler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Galler Kantonalbank 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 St Galler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Galler Kantonalbank has no effect on the direction of Walmart i.e., Walmart and St Galler go up and down completely randomly.

Pair Corralation between Walmart and St Galler

Assuming the 90 days trading horizon Walmart is expected to generate 30.51 times less return on investment than St Galler. But when comparing it to its historical volatility, Walmart is 14.51 times less risky than St Galler. It trades about 0.13 of its potential returns per unit of risk. St Galler Kantonalbank is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  42,850  in St Galler Kantonalbank on December 22, 2024 and sell it today you would earn a total of  5,250  from holding St Galler Kantonalbank or generate 12.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Walmart  vs.  St Galler Kantonalbank

Walmart

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 9 (%) 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.

St Galler Kantonalbank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in St Galler Kantonalbank are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, St Galler may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Walmart and St Galler

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

The idea behind Walmart and St Galler Kantonalbank 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.