Correlation Between Walmart and Ballantyne Strong

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

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

Diversification Opportunities for Walmart and Ballantyne Strong

-0.28

Correlation Coefficient

Walmart  Ballantyne Strong

Very good diversification

The 3 months correlation between Walmart and Ballantyne is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Ballantyne Strong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballantyne Strong 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 Ballantyne Strong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballantyne Strong has no effect on the direction of Walmart i.e., Walmart and Ballantyne Strong go up and down completely randomly.

Pair Corralation between Walmart and Ballantyne Strong

If you would invest  5,193  in Walmart on October 5, 2024 and sell it today you would earn a total of  3,885  from holding Walmart or generate 74.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.32%
Values	Daily Returns

Walmart  vs.  Ballantyne Strong

Walmart

Risk-Adjusted Performance

16 of 100

Good

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

Ballantyne Strong

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ballantyne Strong has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ballantyne Strong 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 Ballantyne Strong

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

The idea behind Walmart and Ballantyne Strong 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.