Correlation Between Walmart and Personal Group

Can any of the company-specific risk be diversified away by investing in both Walmart and Personal Group 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 Personal Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Walmart and Personal Group Holdings, you can compare the effects of market volatilities on Walmart and Personal Group 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 Personal Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Personal Group.

Diversification Opportunities for Walmart and Personal Group

0.0

Correlation Coefficient

Walmart  Personal Group

Pay attention - limited upside

The 3 months correlation between Walmart and Personal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Personal Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Personal Group 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 Personal Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Personal Group Holdings has no effect on the direction of Walmart i.e., Walmart and Personal Group go up and down completely randomly.

Pair Corralation between Walmart and Personal Group

Assuming the 90 days trading horizon Walmart is expected to generate 71.24 times less return on investment than Personal Group. But when comparing it to its historical volatility, Walmart is 52.38 times less risky than Personal Group. It trades about 0.12 of its potential returns per unit of risk. Personal Group Holdings is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  15,684  in Personal Group Holdings on September 15, 2024 and sell it today you would earn a total of  4,116  from holding Personal Group Holdings or generate 26.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Walmart  vs.  Personal Group Holdings

Walmart

Risk-Adjusted Performance

9 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Walmart is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Personal Group Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Personal Group Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Personal Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walmart and Personal Group

The main advantage of trading using opposite Walmart and Personal Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Personal Group 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 Personal Group will offset losses from the drop in Personal Group's long position.

The idea behind Walmart and Personal Group Holdings 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.