Correlation Between Walmart and Adamis Pharma

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

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

Diversification Opportunities for Walmart and Adamis Pharma

0.0

Correlation Coefficient

Walmart  Adamis Pharma

Pay attention - limited upside

The 3 months correlation between Walmart and Adamis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Adamis Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adamis Pharma 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 Adamis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adamis Pharma has no effect on the direction of Walmart i.e., Walmart and Adamis Pharma go up and down completely randomly.

Pair Corralation between Walmart and Adamis Pharma

If you would invest (100.00) in Adamis Pharma on December 19, 2024 and sell it today you would earn a total of  100.00  from holding Adamis Pharma or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Walmart  vs.  Adamis Pharma

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 weak performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Adamis Pharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adamis Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Adamis Pharma is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Walmart and Adamis Pharma

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

The idea behind Walmart and Adamis Pharma 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 Global Correlations module to find global opportunities by holding instruments from different markets.