Correlation Between Enduro Metals and Walmart

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

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

Diversification Opportunities for Enduro Metals and Walmart

0.15

Correlation Coefficient

Enduro Metals  Walmart

Average diversification

The 3 months correlation between Enduro and Walmart is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Enduro Metals Corp and Walmart Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart Inc CDR and Enduro Metals 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 Enduro Metals Corp 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 Inc CDR has no effect on the direction of Enduro Metals i.e., Enduro Metals and Walmart go up and down completely randomly.

Pair Corralation between Enduro Metals and Walmart

Assuming the 90 days trading horizon Enduro Metals Corp is expected to generate 2.89 times more return on investment than Walmart. However, Enduro Metals is 2.89 times more volatile than Walmart Inc CDR. It trades about 0.03 of its potential returns per unit of risk. Walmart Inc CDR is currently generating about -0.04 per unit of risk. If you would invest  17.00  in Enduro Metals Corp on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Enduro Metals Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Enduro Metals Corp  vs.  Walmart Inc CDR

Enduro Metals Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enduro Metals Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, Enduro Metals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Walmart Inc CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Walmart Inc CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Walmart is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Enduro Metals and Walmart

The main advantage of trading using opposite Enduro Metals and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enduro Metals 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 Enduro Metals Corp and Walmart Inc CDR 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.