Correlation Between Walmart and Camtek

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

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

Diversification Opportunities for Walmart and Camtek

0.25

Correlation Coefficient

Walmart  Camtek

Modest diversification

The 3 months correlation between Walmart and Camtek is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Camtek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camtek 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 Camtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camtek has no effect on the direction of Walmart i.e., Walmart and Camtek go up and down completely randomly.

Pair Corralation between Walmart and Camtek

Considering the 90-day investment horizon Walmart is expected to generate 1.17 times less return on investment than Camtek. But when comparing it to its historical volatility, Walmart is 2.5 times less risky than Camtek. It trades about 0.07 of its potential returns per unit of risk. Camtek is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7,450  in Camtek on November 28, 2024 and sell it today you would earn a total of  238.00  from holding Camtek or generate 3.19% return on investment over 90 days.

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

Walmart  vs.  Camtek

Walmart

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent primary indicators, Walmart may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Camtek

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Camtek are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating primary indicators, Camtek may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Walmart and Camtek

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

The idea behind Walmart and Camtek 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.