Correlation Between Walmart and Anglesey Mining

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

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

Diversification Opportunities for Walmart and Anglesey Mining

0.11

Correlation Coefficient

Walmart  Anglesey Mining

Average diversification

The 3 months correlation between Walmart and Anglesey is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Anglesey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglesey Mining 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 Anglesey Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglesey Mining has no effect on the direction of Walmart i.e., Walmart and Anglesey Mining go up and down completely randomly.

Pair Corralation between Walmart and Anglesey Mining

Assuming the 90 days trading horizon Walmart is expected to generate 64.56 times less return on investment than Anglesey Mining. But when comparing it to its historical volatility, Walmart is 115.36 times less risky than Anglesey Mining. It trades about 0.13 of its potential returns per unit of risk. Anglesey Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  73.00  in Anglesey Mining on December 24, 2024 and sell it today you would earn a total of  12.00  from holding Anglesey Mining or generate 16.44% return on investment over 90 days.

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

Walmart  vs.  Anglesey Mining

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.

Anglesey Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anglesey Mining are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Anglesey Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walmart and Anglesey Mining

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

The idea behind Walmart and Anglesey Mining 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.