Correlation Between Walmart and Condor Energies

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

By analyzing existing cross correlation between Walmart Inc CDR and Condor Energies, you can compare the effects of market volatilities on Walmart and Condor Energies 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 Condor Energies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Condor Energies.

Diversification Opportunities for Walmart and Condor Energies

-0.31

Correlation Coefficient

Walmart  Condor Energies

Very good diversification

The 3 months correlation between Walmart and Condor is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Condor Energies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Condor Energies 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 Inc CDR are associated (or correlated) with Condor Energies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Condor Energies has no effect on the direction of Walmart i.e., Walmart and Condor Energies go up and down completely randomly.

Pair Corralation between Walmart and Condor Energies

Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 0.35 times more return on investment than Condor Energies. However, Walmart Inc CDR is 2.86 times less risky than Condor Energies. It trades about 0.16 of its potential returns per unit of risk. Condor Energies is currently generating about -0.17 per unit of risk. If you would invest  3,685  in Walmart Inc CDR on October 9, 2024 and sell it today you would earn a total of  277.00  from holding Walmart Inc CDR or generate 7.52% return on investment over 90 days.

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

Walmart Inc CDR  vs.  Condor Energies

Walmart Inc CDR

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart Inc CDR are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Walmart displayed solid returns over the last few months and may actually be approaching a breakup point.

Condor Energies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Condor Energies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Condor Energies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Walmart and Condor Energies

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

The idea behind Walmart Inc CDR and Condor Energies 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.