Correlation Between Walmart and C21 Investments

Can any of the company-specific risk be diversified away by investing in both Walmart and C21 Investments 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 C21 Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Walmart and C21 Investments, you can compare the effects of market volatilities on Walmart and C21 Investments 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 C21 Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and C21 Investments.

Diversification Opportunities for Walmart and C21 Investments

0.42

Correlation Coefficient

Walmart  C21 Investments

Very weak diversification

The 3 months correlation between Walmart and C21 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and C21 Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C21 Investments 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 C21 Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C21 Investments has no effect on the direction of Walmart i.e., Walmart and C21 Investments go up and down completely randomly.

Pair Corralation between Walmart and C21 Investments

Considering the 90-day investment horizon Walmart is expected to under-perform the C21 Investments. But the stock apears to be less risky and, when comparing its historical volatility, Walmart is 4.3 times less risky than C21 Investments. The stock trades about -0.06 of its potential returns per unit of risk. The C21 Investments is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  18.00  in C21 Investments on December 27, 2024 and sell it today you would lose (1.00) from holding C21 Investments or give up 5.56% of portfolio value over 90 days.

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

Walmart  vs.  C21 Investments

Walmart

Risk-Adjusted Performance

Very Weak

Over the last 90 days Walmart has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

C21 Investments

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in C21 Investments are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, C21 Investments may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Walmart and C21 Investments

The main advantage of trading using opposite Walmart and C21 Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, C21 Investments 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 C21 Investments will offset losses from the drop in C21 Investments' long position.

The idea behind Walmart and C21 Investments 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.