Correlation Between Walmart and Stone Ridge

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

By analyzing existing cross correlation between Walmart and Stone Ridge 2058, you can compare the effects of market volatilities on Walmart and Stone Ridge 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 Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Stone Ridge.

Diversification Opportunities for Walmart and Stone Ridge

-0.2

Correlation Coefficient

Walmart  Stone Ridge

Good diversification

The 3 months correlation between Walmart and Stone is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Stone Ridge 2058 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge 2058 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 Stone Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Ridge 2058 has no effect on the direction of Walmart i.e., Walmart and Stone Ridge go up and down completely randomly.

Pair Corralation between Walmart and Stone Ridge

Considering the 90-day investment horizon Walmart is expected to under-perform the Stone Ridge. In addition to that, Walmart is 3.01 times more volatile than Stone Ridge 2058. It trades about -0.04 of its total potential returns per unit of risk. Stone Ridge 2058 is currently generating about 0.05 per unit of volatility. If you would invest  15,675  in Stone Ridge 2058 on December 28, 2024 and sell it today you would earn a total of  259.00  from holding Stone Ridge 2058 or generate 1.65% return on investment over 90 days.

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

Walmart  vs.  Stone Ridge 2058

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.

Stone Ridge 2058

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stone Ridge 2058 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Stone Ridge is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Walmart and Stone Ridge

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

The idea behind Walmart and Stone Ridge 2058 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 CEOs Directory module to screen CEOs from public companies around the world.