Correlation Between Walmart and Thesis Gold

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

Diversification Opportunities for Walmart and Thesis Gold

-0.56

Correlation Coefficient

Walmart  Thesis Gold

Excellent diversification

The 3 months correlation between Walmart and Thesis is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and Thesis Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thesis 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 Thesis Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thesis Gold has no effect on the direction of Walmart i.e., Walmart and Thesis Gold go up and down completely randomly.

Pair Corralation between Walmart and Thesis Gold

Assuming the 90 days trading horizon Walmart Inc CDR is expected to generate 0.28 times more return on investment than Thesis Gold. However, Walmart Inc CDR is 3.55 times less risky than Thesis Gold. It trades about 0.27 of its potential returns per unit of risk. Thesis Gold is currently generating about -0.04 per unit of risk. If you would invest  3,369  in Walmart Inc CDR on September 3, 2024 and sell it today you would earn a total of  668.00  from holding Walmart Inc CDR or generate 19.83% return on investment over 90 days.

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

Walmart Inc CDR  vs.  Thesis Gold

Walmart Inc CDR

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart Inc CDR are ranked lower than 21 (%) 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.

Thesis Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thesis Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Walmart and Thesis Gold

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

The idea behind Walmart Inc CDR and Thesis 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.