Correlation Between Xtract One and Walmart

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

By analyzing existing cross correlation between Xtract One Technologies and Walmart Inc CDR, you can compare the effects of market volatilities on Xtract One and Walmart 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 Xtract One with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtract One and Walmart.

Diversification Opportunities for Xtract One and Walmart

0.38

Correlation Coefficient

Xtract One  Walmart

Weak diversification

The 3 months correlation between Xtract and Walmart is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Xtract One Technologies and Walmart Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart Inc CDR and Xtract One 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 Xtract One Technologies are associated (or correlated) with Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart Inc CDR has no effect on the direction of Xtract One i.e., Xtract One and Walmart go up and down completely randomly.

Pair Corralation between Xtract One and Walmart

Assuming the 90 days trading horizon Xtract One Technologies is expected to under-perform the Walmart. In addition to that, Xtract One is 1.97 times more volatile than Walmart Inc CDR. It trades about -0.12 of its total potential returns per unit of risk. Walmart Inc CDR is currently generating about -0.04 per unit of volatility. If you would invest  3,914  in Walmart Inc CDR on December 31, 2024 and sell it today you would lose (241.00) from holding Walmart Inc CDR or give up 6.16% of portfolio value over 90 days.

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

Xtract One Technologies  vs.  Walmart Inc CDR

Xtract One Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xtract One Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Walmart Inc CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Walmart Inc CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Walmart is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Xtract One and Walmart

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

The idea behind Xtract One Technologies and Walmart Inc CDR 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.