Correlation Between Walmart and Schwab International

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

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

Diversification Opportunities for Walmart and Schwab International

-0.03

Correlation Coefficient

Walmart  Schwab International

Good diversification

The 3 months correlation between Walmart and Schwab is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Schwab International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab International 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 Schwab International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab International has no effect on the direction of Walmart i.e., Walmart and Schwab International go up and down completely randomly.

Pair Corralation between Walmart and Schwab International

Considering the 90-day investment horizon Walmart is expected to under-perform the Schwab International. In addition to that, Walmart is 2.08 times more volatile than Schwab International Equity. It trades about -0.04 of its total potential returns per unit of risk. Schwab International Equity is currently generating about 0.17 per unit of volatility. If you would invest  1,851  in Schwab International Equity on December 28, 2024 and sell it today you would earn a total of  166.00  from holding Schwab International Equity or generate 8.97% return on investment over 90 days.

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

Walmart  vs.  Schwab International Equity

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.

Schwab International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Schwab International Equity are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical indicators, Schwab International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Walmart and Schwab International

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

The idea behind Walmart and Schwab International Equity 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.