Correlation Between Walmart and Equitrans Midstream

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

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

Diversification Opportunities for Walmart and Equitrans Midstream

0.0

Correlation Coefficient

Walmart  Equitrans Midstream

Pay attention - limited upside

The 3 months correlation between Walmart and Equitrans is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Equitrans Midstream Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitrans Midstream Corp 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 Equitrans Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitrans Midstream Corp has no effect on the direction of Walmart i.e., Walmart and Equitrans Midstream go up and down completely randomly.

Pair Corralation between Walmart and Equitrans Midstream

If you would invest  9,244  in Walmart on December 2, 2024 and sell it today you would earn a total of  617.00  from holding Walmart or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Walmart  vs.  Equitrans Midstream Corp

Walmart

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 6 (%) 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 April 2025.

Equitrans Midstream Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Equitrans Midstream Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Equitrans Midstream is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Walmart and Equitrans Midstream

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

The idea behind Walmart and Equitrans Midstream Corp 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.