Correlation Between Walmart and Strix Group

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

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

Diversification Opportunities for Walmart and Strix Group

0.28

Correlation Coefficient

Walmart  Strix Group

Modest diversification

The 3 months correlation between Walmart and Strix is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Strix Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strix Group Plc and Walmart 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 Walmart are associated (or correlated) with Strix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strix Group Plc has no effect on the direction of Walmart i.e., Walmart and Strix Group go up and down completely randomly.

Pair Corralation between Walmart and Strix Group

Assuming the 90 days horizon Walmart is expected to generate 0.61 times more return on investment than Strix Group. However, Walmart is 1.64 times less risky than Strix Group. It trades about 0.08 of its potential returns per unit of risk. Strix Group Plc is currently generating about -0.07 per unit of risk. If you would invest  8,705  in Walmart on November 28, 2024 and sell it today you would earn a total of  543.00  from holding Walmart or generate 6.24% return on investment over 90 days.

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

Walmart  vs.  Strix Group Plc

Walmart

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Walmart may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Strix Group Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Strix Group Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Walmart and Strix Group

The main advantage of trading using opposite Walmart and Strix Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Strix Group 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 Strix Group will offset losses from the drop in Strix Group's long position.

The idea behind Walmart and Strix Group Plc 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.