Correlation Between Walmart and Overstockcom
Can any of the company-specific risk be diversified away by investing in both Walmart and Overstockcom 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 Overstockcom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Overstockcom, you can compare the effects of market volatilities on Walmart and Overstockcom 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 Overstockcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Overstockcom.
Diversification Opportunities for Walmart and Overstockcom
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walmart and Overstockcom is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Overstockcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overstockcom 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 Overstockcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overstockcom has no effect on the direction of Walmart i.e., Walmart and Overstockcom go up and down completely randomly.
Pair Corralation between Walmart and Overstockcom
If you would invest 8,275 in Walmart on August 28, 2024 and sell it today you would earn a total of 675.00 from holding Walmart or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
Walmart vs. Overstockcom
Performance |
| Timeline |
| Walmart |
| Overstockcom |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and Overstockcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Overstockcom
The main advantage of trading using opposite Walmart and Overstockcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Overstockcom 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 Overstockcom will offset losses from the drop in Overstockcom's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Overstockcom vs. Etsy Inc | Overstockcom vs. Chewy Inc | Overstockcom vs. PDD Holdings | Overstockcom vs. Sea |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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