Correlation Between Walmart and Plan Investment

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

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

Diversification Opportunities for Walmart and Plan Investment

0.0

Correlation Coefficient

Walmart  Plan Investment

Pay attention - limited upside

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

Pair Corralation between Walmart and Plan Investment

If you would invest  100.00  in Plan Investment on December 19, 2024 and sell it today you would earn a total of  0.00  from holding Plan Investment or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	92.19%
Values	Daily Returns

Walmart  vs.  Plan Investment

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 latest weak performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Plan Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Plan Investment has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Plan Investment 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 Plan Investment

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

The idea behind Walmart and Plan Investment 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.