Correlation Between Walmart and CENTENE

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

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

Diversification Opportunities for Walmart and CENTENE

0.18

Correlation Coefficient

Walmart  CENTENE

Average diversification

The 3 months correlation between Walmart and CENTENE is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and CENTENE P DEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTENE P DEL 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 CENTENE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTENE P DEL has no effect on the direction of Walmart i.e., Walmart and CENTENE go up and down completely randomly.

Pair Corralation between Walmart and CENTENE

Considering the 90-day investment horizon Walmart is expected to under-perform the CENTENE. In addition to that, Walmart is 1.26 times more volatile than CENTENE P DEL. It trades about -0.06 of its total potential returns per unit of risk. CENTENE P DEL is currently generating about -0.04 per unit of volatility. If you would invest  8,593  in CENTENE P DEL on December 24, 2024 and sell it today you would lose (350.00) from holding CENTENE P DEL or give up 4.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Walmart  vs.  CENTENE P DEL

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 unsteady 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.

CENTENE P DEL

Risk-Adjusted Performance

Very Weak

Over the last 90 days CENTENE P DEL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CENTENE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walmart and CENTENE

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

The idea behind Walmart and CENTENE P DEL 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.