Correlation Between Fundo Investimento and Walmart

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

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

Diversification Opportunities for Fundo Investimento and Walmart

-0.78

Correlation Coefficient

Fundo Investimento  Walmart

Pay attention - limited upside

The 3 months correlation between Fundo and Walmart is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fundo Investimento Imobiliario and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Fundo Investimento 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 Fundo Investimento Imobiliario 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 Fundo Investimento i.e., Fundo Investimento and Walmart go up and down completely randomly.

Pair Corralation between Fundo Investimento and Walmart

Assuming the 90 days trading horizon Fundo Investimento Imobiliario is expected to under-perform the Walmart. In addition to that, Fundo Investimento is 1.38 times more volatile than Walmart. It trades about -0.19 of its total potential returns per unit of risk. Walmart is currently generating about 0.48 per unit of volatility. If you would invest  3,075  in Walmart on September 13, 2024 and sell it today you would earn a total of  518.00  from holding Walmart or generate 16.85% return on investment over 90 days.

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

Fundo Investimento Imobiliario  vs.  Walmart

Fundo Investimento

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fundo Investimento Imobiliario has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Walmart

Risk-Adjusted Performance

21 of 100

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. Despite somewhat weak essential indicators, Walmart sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fundo Investimento and Walmart

The main advantage of trading using opposite Fundo Investimento and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundo Investimento 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 Fundo Investimento Imobiliario 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 Commodity Directory module to find actively traded commodities issued by global exchanges.