Correlation Between Walmart and CMCSA

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Can any of the company-specific risk be diversified away by investing in both Walmart and CMCSA 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 CMCSA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and CMCSA 465 15 FEB 33, you can compare the effects of market volatilities on Walmart and CMCSA 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 CMCSA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and CMCSA.

Diversification Opportunities for Walmart and CMCSA

-0.79
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Walmart and CMCSA is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and CMCSA 465 15 FEB 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMCSA 465 15 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 CMCSA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMCSA 465 15 has no effect on the direction of Walmart i.e., Walmart and CMCSA go up and down completely randomly.

Pair Corralation between Walmart and CMCSA

Considering the 90-day investment horizon Walmart is expected to generate 1.84 times more return on investment than CMCSA. However, Walmart is 1.84 times more volatile than CMCSA 465 15 FEB 33. It trades about 0.15 of its potential returns per unit of risk. CMCSA 465 15 FEB 33 is currently generating about 0.0 per unit of risk. If you would invest  5,050  in Walmart on September 2, 2024 and sell it today you would earn a total of  4,200  from holding Walmart or generate 83.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy99.19%
ValuesDaily Returns

Walmart  vs.  CMCSA 465 15 FEB 33

 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 uncertain primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.
CMCSA 465 15 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CMCSA 465 15 FEB 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CMCSA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Walmart and CMCSA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walmart and CMCSA

The main advantage of trading using opposite Walmart and CMCSA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, CMCSA 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 CMCSA will offset losses from the drop in CMCSA's long position.
The idea behind Walmart and CMCSA 465 15 FEB 33 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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