Correlation Between Walmart and Genesis Land

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

Diversification Opportunities for Walmart and Genesis Land

-0.28

Correlation Coefficient

Walmart  Genesis Land

Very good diversification

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

Pair Corralation between Walmart and Genesis Land

Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 1.13 times more return on investment than Genesis Land. However, Walmart is 1.13 times more volatile than Genesis Land Development. It trades about 0.07 of its potential returns per unit of risk. Genesis Land Development is currently generating about -0.04 per unit of risk. If you would invest  4,022  in Walmart Inc CDR on December 2, 2024 and sell it today you would earn a total of  249.00  from holding Walmart Inc CDR or generate 6.19% 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.  Genesis Land Development

Walmart Inc CDR

Risk-Adjusted Performance

Modest

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

Genesis Land Development

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genesis Land Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Genesis Land is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Walmart and Genesis Land

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

The idea behind Walmart Inc CDR and Genesis Land Development 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..