Correlation Between Walmart and Blackstone Alternative

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

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

Diversification Opportunities for Walmart and Blackstone Alternative

0.84

Correlation Coefficient

Walmart  Blackstone Alternative

Very poor diversification

The 3 months correlation between Walmart and Blackstone is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Blackstone Alternative Multi S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Alternative 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 Blackstone Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Alternative has no effect on the direction of Walmart i.e., Walmart and Blackstone Alternative go up and down completely randomly.

Pair Corralation between Walmart and Blackstone Alternative

Considering the 90-day investment horizon Walmart is expected to generate 5.5 times more return on investment than Blackstone Alternative. However, Walmart is 5.5 times more volatile than Blackstone Alternative Multi Strategy. It trades about 0.2 of its potential returns per unit of risk. Blackstone Alternative Multi Strategy is currently generating about 0.14 per unit of risk. If you would invest  8,063  in Walmart on October 20, 2024 and sell it today you would earn a total of  1,131  from holding Walmart or generate 14.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Walmart  vs.  Blackstone Alternative Multi S

Walmart

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 15 (%) 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.

Blackstone Alternative

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Alternative Multi Strategy are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Blackstone Alternative 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 Blackstone Alternative

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

The idea behind Walmart and Blackstone Alternative Multi Strategy 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.