Correlation Between Vertiv Holdings and Walmart

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

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

Diversification Opportunities for Vertiv Holdings and Walmart

0.29

Correlation Coefficient

Vertiv Holdings  Walmart

Modest diversification

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

Pair Corralation between Vertiv Holdings and Walmart

Considering the 90-day investment horizon Vertiv Holdings Co is expected to under-perform the Walmart. In addition to that, Vertiv Holdings is 3.4 times more volatile than Walmart. It trades about -0.09 of its total potential returns per unit of risk. Walmart is currently generating about -0.05 per unit of volatility. If you would invest  9,032  in Walmart on December 28, 2024 and sell it today you would lose (517.00) from holding Walmart or give up 5.72% of portfolio value over 90 days.

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

Vertiv Holdings Co  vs.  Walmart

Vertiv Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vertiv Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Walmart

Risk-Adjusted Performance

Very Weak

Over the last 90 days Walmart has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Walmart is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vertiv Holdings and Walmart

The main advantage of trading using opposite Vertiv Holdings and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vertiv Holdings 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 Vertiv Holdings Co 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.