Correlation Between Apple and Walmart
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Walmart, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Walmart.
Diversification Opportunities for Apple and Walmart
Almost no diversification
The 3 months correlation between Apple and Walmart is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Apple 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 Apple Inc 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 has no effect on the direction of Apple i.e., Apple and Walmart go up and down completely randomly.
Pair Corralation between Apple and Walmart
Assuming the 90 days trading horizon Apple is expected to generate 1.04 times less return on investment than Walmart. In addition to that, Apple is 1.23 times more volatile than Walmart. It trades about 0.11 of its total potential returns per unit of risk. Walmart is currently generating about 0.14 per unit of volatility. If you would invest 4,305 in Walmart on September 20, 2024 and sell it today you would earn a total of 4,804 from holding Walmart or generate 111.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Walmart
Performance |
| Timeline |
| Apple Inc |
| Walmart |
Apple and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Walmart
The main advantage of trading using opposite Apple and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. GOODYEAR T RUBBER | Apple vs. VULCAN MATERIALS | Apple vs. EAGLE MATERIALS | Apple vs. The Yokohama Rubber |
| Walmart vs. Kaufman Broad SA | Walmart vs. Corporate Travel Management | Walmart vs. Liberty Broadband | Walmart vs. GOLD ROAD RES |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |