Correlation Between Aquagold International and Walmart

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

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

Diversification Opportunities for Aquagold International and Walmart

-0.29

Correlation Coefficient

Aquagold International  Walmart

Very good diversification

The 3 months correlation between Aquagold and Walmart is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Aquagold International 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 Aquagold International 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 Aquagold International i.e., Aquagold International and Walmart go up and down completely randomly.

Pair Corralation between Aquagold International and Walmart

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Walmart. In addition to that, Aquagold International is 10.58 times more volatile than Walmart. It trades about -0.13 of its total potential returns per unit of risk. Walmart is currently generating about 0.27 per unit of volatility. If you would invest  8,699  in Walmart on November 20, 2024 and sell it today you would earn a total of  1,705  from holding Walmart or generate 19.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Aquagold International  vs.  Walmart

Aquagold International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Walmart

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and Walmart

The main advantage of trading using opposite Aquagold International and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International 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 Aquagold International 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.