Correlation Between Walmart and SoFi Social

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

By analyzing existing cross correlation between Walmart and SoFi Social 50, you can compare the effects of market volatilities on Walmart and SoFi Social 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 SoFi Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and SoFi Social.

Diversification Opportunities for Walmart and SoFi Social

0.35

Correlation Coefficient

Walmart  SoFi Social

Weak diversification

The 3 months correlation between Walmart and SoFi is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and SoFi Social 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoFi Social 50 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 SoFi Social. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoFi Social 50 has no effect on the direction of Walmart i.e., Walmart and SoFi Social go up and down completely randomly.

Pair Corralation between Walmart and SoFi Social

Considering the 90-day investment horizon Walmart is expected to generate 1.08 times more return on investment than SoFi Social. However, Walmart is 1.08 times more volatile than SoFi Social 50. It trades about -0.06 of its potential returns per unit of risk. SoFi Social 50 is currently generating about -0.17 per unit of risk. If you would invest  9,300  in Walmart on December 11, 2024 and sell it today you would lose (518.00) from holding Walmart or give up 5.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Walmart  vs.  SoFi Social 50

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.

SoFi Social 50

Risk-Adjusted Performance

Very Weak

Over the last 90 days SoFi Social 50 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the Exchange Traded Fund stockholders.

Pair Trading with Walmart and SoFi Social

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

The idea behind Walmart and SoFi Social 50 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.