Correlation Between Walmart and Arhaus
Can any of the company-specific risk be diversified away by investing in both Walmart and Arhaus 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 Arhaus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Arhaus Inc, you can compare the effects of market volatilities on Walmart and Arhaus 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 Arhaus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Arhaus.
Diversification Opportunities for Walmart and Arhaus
Very good diversification
The 3 months correlation between Walmart and Arhaus is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Arhaus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arhaus Inc 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 Arhaus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arhaus Inc has no effect on the direction of Walmart i.e., Walmart and Arhaus go up and down completely randomly.
Pair Corralation between Walmart and Arhaus
Considering the 90-day investment horizon Walmart is expected to generate 0.32 times more return on investment than Arhaus. However, Walmart is 3.17 times less risky than Arhaus. It trades about 0.25 of its potential returns per unit of risk. Arhaus Inc is currently generating about -0.1 per unit of risk. If you would invest 6,723 in Walmart on September 13, 2024 and sell it today you would earn a total of 2,805 from holding Walmart or generate 41.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Arhaus Inc
Performance |
| Timeline |
| Walmart |
| Arhaus Inc |
Walmart and Arhaus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Arhaus
The main advantage of trading using opposite Walmart and Arhaus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Arhaus 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 Arhaus will offset losses from the drop in Arhaus' long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Arhaus vs. Floor Decor Holdings | Arhaus vs. Live Ventures | Arhaus vs. Home Depot | Arhaus vs. Lowes Companies |
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
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |