Correlation Between Walmart and Big Lots
Can any of the company-specific risk be diversified away by investing in both Walmart and Big Lots 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 Big Lots into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Big Lots, you can compare the effects of market volatilities on Walmart and Big Lots 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 Big Lots. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Big Lots.
Diversification Opportunities for Walmart and Big Lots
Excellent diversification
The 3 months correlation between Walmart and Big is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Big Lots in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Lots 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 Big Lots. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Lots has no effect on the direction of Walmart i.e., Walmart and Big Lots go up and down completely randomly.
Pair Corralation between Walmart and Big Lots
If you would invest 9,035 in Walmart on October 24, 2024 and sell it today you would earn a total of 159.00 from holding Walmart or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 5.56% |
| Values | Daily Returns |
Walmart vs. Big Lots
Performance |
| Timeline |
| Walmart |
| Big Lots |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and Big Lots Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Big Lots
The main advantage of trading using opposite Walmart and Big Lots positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Big Lots 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 Big Lots will offset losses from the drop in Big Lots' long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Big Lots vs. BJs Wholesale Club | Big Lots vs. Dollar General | Big Lots vs. Costco Wholesale Corp | Big Lots vs. Walmart |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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