Correlation Between Walmart and LL Flooring
Can any of the company-specific risk be diversified away by investing in both Walmart and LL Flooring 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 LL Flooring into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and LL Flooring Holdings, you can compare the effects of market volatilities on Walmart and LL Flooring 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 LL Flooring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and LL Flooring.
Diversification Opportunities for Walmart and LL Flooring
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and LL Flooring is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and LL Flooring Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LL Flooring Holdings 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 LL Flooring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LL Flooring Holdings has no effect on the direction of Walmart i.e., Walmart and LL Flooring go up and down completely randomly.
Pair Corralation between Walmart and LL Flooring
Considering the 90-day investment horizon Walmart is expected to generate 0.11 times more return on investment than LL Flooring. However, Walmart is 8.91 times less risky than LL Flooring. It trades about 0.16 of its potential returns per unit of risk. LL Flooring Holdings is currently generating about -0.1 per unit of risk. If you would invest 5,017 in Walmart on September 1, 2024 and sell it today you would earn a total of 4,233 from holding Walmart or generate 84.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 79.84% |
| Values | Daily Returns |
Walmart vs. LL Flooring Holdings
Performance |
| Timeline |
| Walmart |
| LL Flooring Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and LL Flooring Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and LL Flooring
The main advantage of trading using opposite Walmart and LL Flooring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, LL Flooring 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 LL Flooring will offset losses from the drop in LL Flooring's long position.| Walmart vs. Ingles Markets Incorporated | Walmart vs. Sendas Distribuidora SA | Walmart vs. Grocery Outlet Holding | Walmart vs. Village Super Market |
| LL Flooring vs. Haverty Furniture Companies | LL Flooring vs. Arhaus Inc | LL Flooring vs. Tile Shop Holdings | LL Flooring vs. Floor Decor Holdings |
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
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |