Correlation Between Walmart and PACIFIC

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

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

Diversification Opportunities for Walmart and PACIFIC

-0.31

Correlation Coefficient

Walmart  PACIFIC

Very good diversification

The 3 months correlation between Walmart and PACIFIC is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and PACIFIC GAS AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC GAS AND 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 PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACIFIC GAS AND has no effect on the direction of Walmart i.e., Walmart and PACIFIC go up and down completely randomly.

Pair Corralation between Walmart and PACIFIC

Considering the 90-day investment horizon Walmart is expected to generate 0.56 times more return on investment than PACIFIC. However, Walmart is 1.79 times less risky than PACIFIC. It trades about 0.14 of its potential returns per unit of risk. PACIFIC GAS AND is currently generating about 0.04 per unit of risk. If you would invest  4,668  in Walmart on October 22, 2024 and sell it today you would earn a total of  4,526  from holding Walmart or generate 96.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.99%
Values	Daily Returns

Walmart  vs.  PACIFIC GAS AND

Walmart

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Walmart may actually be approaching a critical reversion point that can send shares even higher in February 2025.

PACIFIC GAS AND

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PACIFIC GAS AND are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, PACIFIC sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walmart and PACIFIC

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

The idea behind Walmart and PACIFIC GAS AND 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.