Correlation Between Personal Group and Walmart

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

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

Diversification Opportunities for Personal Group and Walmart

0.0

Correlation Coefficient

Personal Group  Walmart

Pay attention - limited upside

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

Pair Corralation between Personal Group and Walmart

Assuming the 90 days trading horizon Personal Group Holdings is expected to generate 52.38 times more return on investment than Walmart. However, Personal Group is 52.38 times more volatile than Walmart. It trades about 0.17 of its potential returns per unit of risk. Walmart is currently generating about 0.12 per unit of risk. 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

Personal Group Holdings  vs.  Walmart

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.

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.

Pair Trading with Personal Group and Walmart

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

The idea behind Personal Group Holdings and Walmart 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.