Correlation Between Walmart and PLAYTIKA HOLDING

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

By analyzing existing cross correlation between Walmart and PLAYTIKA HOLDING DL 01, you can compare the effects of market volatilities on Walmart and PLAYTIKA HOLDING 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 PLAYTIKA HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and PLAYTIKA HOLDING.

Diversification Opportunities for Walmart and PLAYTIKA HOLDING

0.75

Correlation Coefficient

Walmart  PLAYTIKA HOLDING

Poor diversification

The 3 months correlation between Walmart and PLAYTIKA is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and PLAYTIKA HOLDING DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTIKA HOLDING 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 PLAYTIKA HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYTIKA HOLDING has no effect on the direction of Walmart i.e., Walmart and PLAYTIKA HOLDING go up and down completely randomly.

Pair Corralation between Walmart and PLAYTIKA HOLDING

Assuming the 90 days trading horizon Walmart is expected to generate 0.63 times more return on investment than PLAYTIKA HOLDING. However, Walmart is 1.59 times less risky than PLAYTIKA HOLDING. It trades about -0.07 of its potential returns per unit of risk. PLAYTIKA HOLDING DL 01 is currently generating about -0.29 per unit of risk. If you would invest  8,564  in Walmart on December 23, 2024 and sell it today you would lose (647.00) from holding Walmart or give up 7.55% of portfolio value over 90 days.

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

Walmart  vs.  PLAYTIKA HOLDING DL 01

Walmart

Risk-Adjusted Performance

Very Weak

Over the last 90 days Walmart has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

PLAYTIKA HOLDING

Risk-Adjusted Performance

Very Weak

Over the last 90 days PLAYTIKA HOLDING DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Walmart and PLAYTIKA HOLDING

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

The idea behind Walmart and PLAYTIKA HOLDING DL 01 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.