Correlation Between Walmart and Angel Oak

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

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

Diversification Opportunities for Walmart and Angel Oak

0.73

Correlation Coefficient

Walmart  Angel Oak

Poor diversification

The 3 months correlation between Walmart and Angel is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Angel Oak High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak High 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 Angel Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel Oak High has no effect on the direction of Walmart i.e., Walmart and Angel Oak go up and down completely randomly.

Pair Corralation between Walmart and Angel Oak

Considering the 90-day investment horizon Walmart is expected to generate 5.09 times more return on investment than Angel Oak. However, Walmart is 5.09 times more volatile than Angel Oak High. It trades about 0.14 of its potential returns per unit of risk. Angel Oak High is currently generating about 0.16 per unit of risk. If you would invest  4,560  in Walmart on October 11, 2024 and sell it today you would earn a total of  4,620  from holding Walmart or generate 101.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	45.25%
Values	Daily Returns

Walmart  vs.  Angel Oak High

Walmart

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

Angel Oak High

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Angel Oak High are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, Angel Oak is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walmart and Angel Oak

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

The idea behind Walmart and Angel Oak High 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.