Correlation Between Procter Gamble and Walmart

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Procter Gamble 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 Procter Gamble and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble DRC and Walmart, you can compare the effects of market volatilities on Procter Gamble 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 Procter Gamble with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Walmart.

Diversification Opportunities for Procter Gamble and Walmart

0.24
  Correlation Coefficient

Modest diversification

The 3 months correlation between Procter and Walmart is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble DRC and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Procter Gamble 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 Procter Gamble DRC 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 Procter Gamble i.e., Procter Gamble and Walmart go up and down completely randomly.

Pair Corralation between Procter Gamble and Walmart

Assuming the 90 days horizon Procter Gamble DRC is expected to under-perform the Walmart. In addition to that, Procter Gamble is 1.02 times more volatile than Walmart. It trades about -0.09 of its total potential returns per unit of risk. Walmart is currently generating about 0.11 per unit of volatility. If you would invest  560,000  in Walmart on November 2, 2024 and sell it today you would earn a total of  85,000  from holding Walmart or generate 15.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Procter Gamble DRC  vs.  Walmart

 Performance 
       Timeline  
Procter Gamble DRC 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Procter Gamble DRC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Procter Gamble is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Walmart 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Walmart sustained solid returns over the last few months and may actually be approaching a breakup point.

Procter Gamble and Walmart Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Procter Gamble and Walmart

The main advantage of trading using opposite Procter Gamble and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble 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 Procter Gamble DRC and Walmart 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

Other Complementary Tools

Global Correlations
Find global opportunities by holding instruments from different markets
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals