Correlation Between Walmart and Blue Apron

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

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

Diversification Opportunities for Walmart and Blue Apron

-0.59

Correlation Coefficient

Walmart  Blue Apron

Excellent diversification

The 3 months correlation between Walmart and Blue is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Blue Apron Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Apron Holdings, 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 Blue Apron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Apron Holdings, has no effect on the direction of Walmart i.e., Walmart and Blue Apron go up and down completely randomly.

Pair Corralation between Walmart and Blue Apron

Considering the 90-day investment horizon Walmart is expected to generate 0.11 times more return on investment than Blue Apron. However, Walmart is 9.05 times less risky than Blue Apron. It trades about 0.13 of its potential returns per unit of risk. Blue Apron Holdings, is currently generating about 0.01 per unit of risk. If you would invest  4,796  in Walmart on September 3, 2024 and sell it today you would earn a total of  4,454  from holding Walmart or generate 92.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	30.91%
Values	Daily Returns

Walmart  vs.  Blue Apron Holdings,

Walmart

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

Blue Apron Holdings,

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Walmart and Blue Apron

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

The idea behind Walmart and Blue Apron Holdings, 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..