Correlation Between Walmart and Golden Tag

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

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

Diversification Opportunities for Walmart and Golden Tag

0.0

Correlation Coefficient

Walmart  Golden Tag

Pay attention - limited upside

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

Pair Corralation between Walmart and Golden Tag

If you would invest (100.00) in Golden Tag Resources on December 4, 2024 and sell it today you would earn a total of  100.00  from holding Golden Tag Resources 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.  Golden Tag Resources

Walmart

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, Walmart is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Golden Tag Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Golden Tag Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Golden Tag is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Walmart and Golden Tag

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

The idea behind Walmart and Golden Tag Resources 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .