Correlation Between Walmart and Cue Health

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

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

Diversification Opportunities for Walmart and Cue Health

0.0

Correlation Coefficient

Walmart  Cue Health

Pay attention - limited upside

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

Pair Corralation between Walmart and Cue Health

If you would invest (100.00) in Cue Health on December 24, 2024 and sell it today you would earn a total of  100.00  from holding Cue Health 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.  Cue Health

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.

Cue Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cue Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Cue Health is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Walmart and Cue Health

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

The idea behind Walmart and Cue Health 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.