Correlation Between Walmart and 1ws Credit

Can any of the company-specific risk be diversified away by investing in both Walmart and 1ws Credit 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 1ws Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Walmart and 1ws Credit Income, you can compare the effects of market volatilities on Walmart and 1ws Credit 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 1ws Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and 1ws Credit.

Diversification Opportunities for Walmart and 1ws Credit

0.47

Correlation Coefficient

Walmart  1ws Credit

Very weak diversification

The 3 months correlation between Walmart and 1ws is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and 1ws Credit Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1ws Credit Income 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 1ws Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1ws Credit Income has no effect on the direction of Walmart i.e., Walmart and 1ws Credit go up and down completely randomly.

Pair Corralation between Walmart and 1ws Credit

Considering the 90-day investment horizon Walmart is expected to generate 1.46 times more return on investment than 1ws Credit. However, Walmart is 1.46 times more volatile than 1ws Credit Income. It trades about 0.1 of its potential returns per unit of risk. 1ws Credit Income is currently generating about 0.05 per unit of risk. If you would invest  9,035  in Walmart on October 22, 2024 and sell it today you would earn a total of  159.00  from holding Walmart or generate 1.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Walmart  vs.  1ws Credit Income

Walmart

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Walmart may actually be approaching a critical reversion point that can send shares even higher in February 2025.

1ws Credit Income

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 1ws Credit Income are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, 1ws Credit 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 1ws Credit

The main advantage of trading using opposite Walmart and 1ws Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, 1ws Credit 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 1ws Credit will offset losses from the drop in 1ws Credit's long position.

The idea behind Walmart and 1ws Credit Income 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.