Correlation Between Walmart and G Willi

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

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

Diversification Opportunities for Walmart and G Willi

0.51

Correlation Coefficient

Walmart  G Willi

Very weak diversification

The 3 months correlation between Walmart and WILC is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and G Willi Food International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Willi Food 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 G Willi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Willi Food has no effect on the direction of Walmart i.e., Walmart and G Willi go up and down completely randomly.

Pair Corralation between Walmart and G Willi

Considering the 90-day investment horizon Walmart is expected to under-perform the G Willi. In addition to that, Walmart is 1.0 times more volatile than G Willi Food International. It trades about -0.04 of its total potential returns per unit of risk. G Willi Food International is currently generating about -0.02 per unit of volatility. If you would invest  1,604  in G Willi Food International on December 28, 2024 and sell it today you would lose (45.00) from holding G Willi Food International or give up 2.81% of portfolio value over 90 days.

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

Walmart  vs.  G Willi Food International

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 comparatively stable primary indicators, Walmart is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

G Willi Food

Risk-Adjusted Performance

Very Weak

Over the last 90 days G Willi Food International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, G Willi is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Walmart and G Willi

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

The idea behind Walmart and G Willi Food International 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.

Check out your portfolio center.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.