Correlation Between Trellus Health and Walmart

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

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

Diversification Opportunities for Trellus Health and Walmart

0.37

Correlation Coefficient

Trellus Health  Walmart

Weak diversification

The 3 months correlation between Trellus and Walmart is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Trellus Health plc and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Trellus Health 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 Trellus Health plc 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 Trellus Health i.e., Trellus Health and Walmart go up and down completely randomly.

Pair Corralation between Trellus Health and Walmart

If you would invest  57.00  in Trellus Health plc on October 26, 2024 and sell it today you would earn a total of  193.00  from holding Trellus Health plc or generate 338.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Trellus Health plc  vs.  Walmart

Trellus Health plc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trellus Health plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Trellus Health unveiled solid returns over the last few months and may actually be approaching a breakup point.

Walmart

Risk-Adjusted Performance

10 of 100

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.

Pair Trading with Trellus Health and Walmart

The main advantage of trading using opposite Trellus Health and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trellus Health 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 Trellus Health plc 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.