Correlation Between Walmart and Peraso

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

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

Diversification Opportunities for Walmart and Peraso

-0.15

Correlation Coefficient

Walmart  Peraso

Good diversification

The 3 months correlation between Walmart and Peraso is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Peraso Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peraso Inc 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 Peraso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peraso Inc has no effect on the direction of Walmart i.e., Walmart and Peraso go up and down completely randomly.

Pair Corralation between Walmart and Peraso

Considering the 90-day investment horizon Walmart is expected to under-perform the Peraso. But the stock apears to be less risky and, when comparing its historical volatility, Walmart is 4.59 times less risky than Peraso. The stock trades about -0.04 of its potential returns per unit of risk. The Peraso Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Peraso Inc on December 21, 2024 and sell it today you would lose (9.00) from holding Peraso Inc or give up 10.0% of portfolio value over 90 days.

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

Walmart  vs.  Peraso Inc

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Peraso Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Peraso Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Peraso may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Walmart and Peraso

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

The idea behind Walmart and Peraso Inc 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.