Correlation Between Walmart and ETF Managers

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

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

Diversification Opportunities for Walmart and ETF Managers

-0.86

Correlation Coefficient

Walmart  ETF Managers

Pay attention - limited upside

The 3 months correlation between Walmart and ETF is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and ETF Managers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Managers Group 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 ETF Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Managers Group has no effect on the direction of Walmart i.e., Walmart and ETF Managers go up and down completely randomly.

Pair Corralation between Walmart and ETF Managers

If you would invest  175.00  in ETF Managers Group on October 10, 2024 and sell it today you would earn a total of  0.00  from holding ETF Managers Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	5.0%
Values	Daily Returns

Walmart  vs.  ETF Managers Group

Walmart

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

ETF Managers Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ETF Managers Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, ETF Managers is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walmart and ETF Managers

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

The idea behind Walmart and ETF Managers Group 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.