Correlation Between Walmart and USCF ETF

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Can any of the company-specific risk be diversified away by investing in both Walmart and USCF ETF 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 USCF ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and USCF ETF Trust, you can compare the effects of market volatilities on Walmart and USCF ETF 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 USCF ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and USCF ETF.

Diversification Opportunities for Walmart and USCF ETF

0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Walmart and USCF is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and USCF ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF ETF Trust 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 USCF ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF ETF Trust has no effect on the direction of Walmart i.e., Walmart and USCF ETF go up and down completely randomly.

Pair Corralation between Walmart and USCF ETF

Considering the 90-day investment horizon Walmart is expected to generate 1.05 times more return on investment than USCF ETF. However, Walmart is 1.05 times more volatile than USCF ETF Trust. It trades about 0.54 of its potential returns per unit of risk. USCF ETF Trust is currently generating about 0.22 per unit of risk. If you would invest  8,195  in Walmart on September 1, 2024 and sell it today you would earn a total of  1,055  from holding Walmart or generate 12.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.45%
ValuesDaily Returns

Walmart  vs.  USCF ETF Trust

 Performance 
       Timeline  
Walmart 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.
USCF ETF Trust 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in USCF ETF Trust are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, USCF ETF may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Walmart and USCF ETF Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walmart and USCF ETF

The main advantage of trading using opposite Walmart and USCF ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, USCF ETF 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 USCF ETF will offset losses from the drop in USCF ETF's long position.
The idea behind Walmart and USCF ETF Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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