Correlation Between Walmart and GCLN

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

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

Diversification Opportunities for Walmart and GCLN

0.0

Correlation Coefficient

Walmart  GCLN

Pay attention - limited upside

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

Pair Corralation between Walmart and GCLN

If you would invest (100.00) in GCLN on December 21, 2024 and sell it today you would earn a total of  100.00  from holding GCLN or generate -100.0% return on investment over 90 days.

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

Walmart  vs.  GCLN

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

GCLN

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Walmart and GCLN

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

The idea behind Walmart and GCLN 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.