Correlation Between Walmart and Nuveen Amt-free

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

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

Diversification Opportunities for Walmart and Nuveen Amt-free

-0.37

Correlation Coefficient

Walmart  Nuveen Amt-free

Very good diversification

The 3 months correlation between Walmart and Nuveen is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Nuveen Amt Free Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Amt Free 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 Nuveen Amt-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Amt Free has no effect on the direction of Walmart i.e., Walmart and Nuveen Amt-free go up and down completely randomly.

Pair Corralation between Walmart and Nuveen Amt-free

Considering the 90-day investment horizon Walmart is expected to generate 2.31 times more return on investment than Nuveen Amt-free. However, Walmart is 2.31 times more volatile than Nuveen Amt Free Municipal. It trades about 0.27 of its potential returns per unit of risk. Nuveen Amt Free Municipal is currently generating about 0.02 per unit of risk. If you would invest  7,717  in Walmart on September 3, 2024 and sell it today you would earn a total of  1,533  from holding Walmart or generate 19.87% return on investment over 90 days.

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

Walmart  vs.  Nuveen Amt Free Municipal

Walmart

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

Nuveen Amt Free

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Amt Free Municipal are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, Nuveen Amt-free is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Walmart and Nuveen Amt-free

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

The idea behind Walmart and Nuveen Amt Free Municipal 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.