Correlation Between Walmart and BC Technology

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

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

Diversification Opportunities for Walmart and BC Technology

0.87

Correlation Coefficient

Walmart  BC Technology

Very poor diversification

The 3 months correlation between Walmart and BCTCF is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and BC Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC Technology Group 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 BC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BC Technology Group has no effect on the direction of Walmart i.e., Walmart and BC Technology go up and down completely randomly.

Pair Corralation between Walmart and BC Technology

If you would invest  107.00  in BC Technology Group on October 9, 2024 and sell it today you would earn a total of  0.00  from holding BC Technology Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.0%
Values	Daily Returns

Walmart  vs.  BC Technology Group

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 uncertain primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

BC Technology Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BC Technology Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, BC Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walmart and BC Technology

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

The idea behind Walmart and BC Technology Group 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.