Correlation Between Walmart and Goldspot Discoveries

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

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

Diversification Opportunities for Walmart and Goldspot Discoveries

-0.84

Correlation Coefficient

Walmart  Goldspot Discoveries

Pay attention - limited upside

The 3 months correlation between Walmart and Goldspot is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Goldspot Discoveries Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldspot Discoveries Corp 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 Goldspot Discoveries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldspot Discoveries Corp has no effect on the direction of Walmart i.e., Walmart and Goldspot Discoveries go up and down completely randomly.

Pair Corralation between Walmart and Goldspot Discoveries

Considering the 90-day investment horizon Walmart is expected to generate 0.27 times more return on investment than Goldspot Discoveries. However, Walmart is 3.69 times less risky than Goldspot Discoveries. It trades about 0.21 of its potential returns per unit of risk. Goldspot Discoveries Corp is currently generating about -0.08 per unit of risk. If you would invest  8,011  in Walmart on October 12, 2024 and sell it today you would earn a total of  1,169  from holding Walmart or generate 14.59% return on investment over 90 days.

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

Walmart  vs.  Goldspot Discoveries Corp

Walmart

Risk-Adjusted Performance

16 of 100

Solid

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.

Goldspot Discoveries Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldspot Discoveries Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Walmart and Goldspot Discoveries

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

The idea behind Walmart and Goldspot Discoveries Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.