Correlation Between Walmart and Flow Traders

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

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

Diversification Opportunities for Walmart and Flow Traders

0.0

Correlation Coefficient

Walmart  Flow Traders

Pay attention - limited upside

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

Pair Corralation between Walmart and Flow Traders

Assuming the 90 days trading horizon Walmart is expected to generate 66.02 times less return on investment than Flow Traders. But when comparing it to its historical volatility, Walmart is 41.91 times less risky than Flow Traders. It trades about 0.13 of its potential returns per unit of risk. Flow Traders NV is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  2,154  in Flow Traders NV on December 23, 2024 and sell it today you would earn a total of  586.00  from holding Flow Traders NV or generate 27.21% return on investment over 90 days.

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

Walmart  vs.  Flow Traders NV

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

Flow Traders NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flow Traders NV are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Flow Traders unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walmart and Flow Traders

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

The idea behind Walmart and Flow Traders NV 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.