Correlation Between Walmart and Global Partner
Can any of the company-specific risk be diversified away by investing in both Walmart and Global Partner 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 Global Partner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Global Partner Acq, you can compare the effects of market volatilities on Walmart and Global Partner 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 Global Partner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Global Partner.
Diversification Opportunities for Walmart and Global Partner
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and Global is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Global Partner Acq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partner Acq 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 Global Partner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partner Acq has no effect on the direction of Walmart i.e., Walmart and Global Partner go up and down completely randomly.
Pair Corralation between Walmart and Global Partner
Considering the 90-day investment horizon Walmart is expected to generate 0.47 times more return on investment than Global Partner. However, Walmart is 2.11 times less risky than Global Partner. It trades about 0.25 of its potential returns per unit of risk. Global Partner Acq is currently generating about -0.21 per unit of risk. If you would invest 6,563 in Walmart on September 1, 2024 and sell it today you would earn a total of 2,687 from holding Walmart or generate 40.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 19.84% |
| Values | Daily Returns |
Walmart vs. Global Partner Acq
Performance |
| Timeline |
| Walmart |
| Global Partner Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and Global Partner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Global Partner
The main advantage of trading using opposite Walmart and Global Partner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Global Partner 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 Global Partner will offset losses from the drop in Global Partner's long position.| Walmart vs. Ingles Markets Incorporated | Walmart vs. Grocery Outlet Holding | Walmart vs. Ocado Group plc | Walmart vs. Sprouts Farmers Market |
| Global Partner vs. NH Foods Ltd | Global Partner vs. Diageo PLC ADR | Global Partner vs. Lifevantage | Global Partner vs. Grocery Outlet Holding |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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