Correlation Between Wal Mart and Walmart

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

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

Diversification Opportunities for Wal Mart and Walmart

-0.83

Correlation Coefficient

Wal Mart  Walmart

Pay attention - limited upside

The 3 months correlation between Wal and Walmart is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Wal Mart de and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Wal Mart 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 Wal Mart de 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 Wal Mart i.e., Wal Mart and Walmart go up and down completely randomly.

Pair Corralation between Wal Mart and Walmart

Assuming the 90 days horizon Wal Mart de is expected to under-perform the Walmart. In addition to that, Wal Mart is 2.83 times more volatile than Walmart. It trades about -0.11 of its total potential returns per unit of risk. Walmart is currently generating about 0.53 per unit of volatility. If you would invest  8,139  in Walmart on August 31, 2024 and sell it today you would earn a total of  1,049  from holding Walmart or generate 12.89% return on investment over 90 days.

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

Wal Mart de  vs.  Walmart

Wal Mart de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wal Mart de 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 nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Walmart

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wal Mart and Walmart

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