Correlation Between Walmart and Tigo Energy

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

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

Diversification Opportunities for Walmart and Tigo Energy

-0.92

Correlation Coefficient

Walmart  Tigo Energy

Pay attention - limited upside

The 3 months correlation between Walmart and Tigo is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Tigo Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tigo Energy 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 Tigo Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tigo Energy has no effect on the direction of Walmart i.e., Walmart and Tigo Energy go up and down completely randomly.

Pair Corralation between Walmart and Tigo Energy

Considering the 90-day investment horizon Walmart is expected to generate 0.14 times more return on investment than Tigo Energy. However, Walmart is 7.14 times less risky than Tigo Energy. It trades about 0.14 of its potential returns per unit of risk. Tigo Energy is currently generating about -0.03 per unit of risk. If you would invest  4,694  in Walmart on October 23, 2024 and sell it today you would earn a total of  4,500  from holding Walmart or generate 95.87% return on investment over 90 days.

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

Walmart  vs.  Tigo Energy

Walmart

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Walmart may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Tigo Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tigo Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Walmart and Tigo Energy

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

The idea behind Walmart and Tigo Energy 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.