Correlation Between Walmart and Ab Global

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

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

Diversification Opportunities for Walmart and Ab Global

-0.58

Correlation Coefficient

Walmart  Ab Global

Excellent diversification

The 3 months correlation between Walmart and ARSYX is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Ab Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Real 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 Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Real has no effect on the direction of Walmart i.e., Walmart and Ab Global go up and down completely randomly.

Pair Corralation between Walmart and Ab Global

Considering the 90-day investment horizon Walmart is expected to generate 1.31 times more return on investment than Ab Global. However, Walmart is 1.31 times more volatile than Ab Global Real. It trades about 0.19 of its potential returns per unit of risk. Ab Global Real is currently generating about -0.13 per unit of risk. If you would invest  8,326  in Walmart on October 7, 2024 and sell it today you would earn a total of  752.00  from holding Walmart or generate 9.03% return on investment over 90 days.

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

Walmart  vs.  Ab Global Real

Walmart

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ab Global Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Global Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Walmart and Ab Global

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

The idea behind Walmart and Ab Global Real 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.