Correlation Between Walmart and Tidal Trust

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

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

Diversification Opportunities for Walmart and Tidal Trust

-0.46

Correlation Coefficient

Walmart  Tidal Trust

Very good diversification

The 3 months correlation between Walmart and Tidal is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Tidal Trust II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust II 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 Tidal Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Trust II has no effect on the direction of Walmart i.e., Walmart and Tidal Trust go up and down completely randomly.

Pair Corralation between Walmart and Tidal Trust

Considering the 90-day investment horizon Walmart is expected to under-perform the Tidal Trust. But the stock apears to be less risky and, when comparing its historical volatility, Walmart is 1.98 times less risky than Tidal Trust. The stock trades about -0.05 of its potential returns per unit of risk. The Tidal Trust II is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,136  in Tidal Trust II on December 28, 2024 and sell it today you would earn a total of  110.00  from holding Tidal Trust II or generate 9.68% return on investment over 90 days.

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

Walmart  vs.  Tidal Trust II

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 comparatively stable primary indicators, Walmart is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Tidal Trust II

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal Trust II are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Tidal Trust unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walmart and Tidal Trust

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

The idea behind Walmart and Tidal Trust II 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.