Correlation Between Tesla and Walmart
Can any of the company-specific risk be diversified away by investing in both Tesla 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 Tesla and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and Walmart, you can compare the effects of market volatilities on Tesla 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 Tesla with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Walmart.
Diversification Opportunities for Tesla and Walmart
Almost no diversification
The 3 months correlation between Tesla and Walmart is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Tesla 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 Tesla 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 Tesla i.e., Tesla and Walmart go up and down completely randomly.
Pair Corralation between Tesla and Walmart
Assuming the 90 days horizon Tesla Inc is expected to generate 3.03 times more return on investment than Walmart. However, Tesla is 3.03 times more volatile than Walmart. It trades about 0.07 of its potential returns per unit of risk. Walmart is currently generating about 0.14 per unit of risk. If you would invest 15,390 in Tesla Inc on October 20, 2024 and sell it today you would earn a total of 26,255 from holding Tesla Inc or generate 170.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. Walmart
Performance |
| Timeline |
| Tesla Inc |
| Walmart |
Tesla and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Walmart
The main advantage of trading using opposite Tesla and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla 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.| Tesla vs. Erste Group Bank | Tesla vs. RETAIL FOOD GROUP | Tesla vs. FAST RETAIL ADR | Tesla vs. H2O Retailing |
| Walmart vs. Liberty Broadband | Walmart vs. X FAB Silicon Foundries | Walmart vs. Casio Computer CoLtd | Walmart vs. Zoom Video Communications |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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