Correlation Between Walmart and 983130AX3

Can any of the company-specific risk be diversified away by investing in both Walmart and 983130AX3 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 983130AX3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Walmart and Wynn Las Vegas, you can compare the effects of market volatilities on Walmart and 983130AX3 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 983130AX3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and 983130AX3.

Diversification Opportunities for Walmart and 983130AX3

-0.31

Correlation Coefficient

Walmart  983130AX3

Very good diversification

The 3 months correlation between Walmart and 983130AX3 is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Wynn Las Vegas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wynn Las Vegas 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 983130AX3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wynn Las Vegas has no effect on the direction of Walmart i.e., Walmart and 983130AX3 go up and down completely randomly.

Pair Corralation between Walmart and 983130AX3

Considering the 90-day investment horizon Walmart is expected to generate 1.26 times more return on investment than 983130AX3. However, Walmart is 1.26 times more volatile than Wynn Las Vegas. It trades about 0.21 of its potential returns per unit of risk. Wynn Las Vegas is currently generating about -0.15 per unit of risk. If you would invest  7,893  in Walmart on October 7, 2024 and sell it today you would earn a total of  1,185  from holding Walmart or generate 15.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.3%
Values	Daily Returns

Walmart  vs.  Wynn Las Vegas

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 inconsistent primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

Wynn Las Vegas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wynn Las Vegas has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Wynn Las Vegas investors.

Pair Trading with Walmart and 983130AX3

The main advantage of trading using opposite Walmart and 983130AX3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, 983130AX3 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 983130AX3 will offset losses from the drop in 983130AX3's long position.

The idea behind Walmart and Wynn Las Vegas 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.