Correlation Between Walmart and Sprott Physical

Can any of the company-specific risk be diversified away by investing in both Walmart and Sprott Physical 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 Sprott Physical 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 Sprott Physical Gold, you can compare the effects of market volatilities on Walmart and Sprott Physical 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 Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Sprott Physical.

Diversification Opportunities for Walmart and Sprott Physical

0.09

Correlation Coefficient

Walmart  Sprott Physical

Significant diversification

The 3 months correlation between Walmart and Sprott is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Sprott Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Gold 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 Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Gold has no effect on the direction of Walmart i.e., Walmart and Sprott Physical go up and down completely randomly.

Pair Corralation between Walmart and Sprott Physical

Assuming the 90 days trading horizon Walmart Inc CDR is expected to under-perform the Sprott Physical. In addition to that, Walmart is 2.07 times more volatile than Sprott Physical Gold. It trades about -0.06 of its total potential returns per unit of risk. Sprott Physical Gold is currently generating about 0.26 per unit of volatility. If you would invest  2,401  in Sprott Physical Gold on December 24, 2024 and sell it today you would earn a total of  372.00  from holding Sprott Physical Gold or generate 15.49% return on investment over 90 days.

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

Walmart Inc CDR  vs.  Sprott Physical Gold

Walmart Inc CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Walmart Inc CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Sprott Physical Gold

Risk-Adjusted Performance

Solid

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

Pair Trading with Walmart and Sprott Physical

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

The idea behind Walmart Inc CDR and Sprott Physical Gold 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.