Correlation Between Walmart and Gamco Global

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

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

Diversification Opportunities for Walmart and Gamco Global

0.6

Correlation Coefficient

Walmart  Gamco Global

Poor diversification

The 3 months correlation between Walmart and Gamco is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Gamco Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Global Growth 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 Gamco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco Global Growth has no effect on the direction of Walmart i.e., Walmart and Gamco Global go up and down completely randomly.

Pair Corralation between Walmart and Gamco Global

Considering the 90-day investment horizon Walmart is expected to generate 1.15 times more return on investment than Gamco Global. However, Walmart is 1.15 times more volatile than Gamco Global Growth. It trades about 0.17 of its potential returns per unit of risk. Gamco Global Growth is currently generating about 0.05 per unit of risk. If you would invest  5,965  in Walmart on December 2, 2024 and sell it today you would earn a total of  3,896  from holding Walmart or generate 65.31% return on investment over 90 days.

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

Walmart  vs.  Gamco Global Growth

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.

Gamco Global Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gamco Global Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Gamco Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walmart and Gamco Global

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

The idea behind Walmart and Gamco Global Growth 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.