Correlation Between Walmart and Tianci International

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

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

Diversification Opportunities for Walmart and Tianci International

-0.29

Correlation Coefficient

Walmart  Tianci International

Very good diversification

The 3 months correlation between Walmart and Tianci is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Tianci International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianci International 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 Tianci International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianci International has no effect on the direction of Walmart i.e., Walmart and Tianci International go up and down completely randomly.

Pair Corralation between Walmart and Tianci International

Considering the 90-day investment horizon Walmart is expected to generate 0.39 times more return on investment than Tianci International. However, Walmart is 2.56 times less risky than Tianci International. It trades about 0.2 of its potential returns per unit of risk. Tianci International is currently generating about 0.01 per unit of risk. If you would invest  7,893  in Walmart on October 5, 2024 and sell it today you would earn a total of  1,107  from holding Walmart or generate 14.03% return on investment over 90 days.

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

Walmart  vs.  Tianci International

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

Tianci International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tianci International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Tianci International is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Walmart and Tianci International

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

The idea behind Walmart and Tianci International 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.