Correlation Between Walmart and MAS Gold

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

By analyzing existing cross correlation between Walmart Inc CDR and MAS Gold Corp, you can compare the effects of market volatilities on Walmart and MAS Gold 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 MAS Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and MAS Gold.

Diversification Opportunities for Walmart and MAS Gold

-0.35

Correlation Coefficient

Walmart  MAS Gold

Very good diversification

The 3 months correlation between Walmart and MAS is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Walmart Inc CDR and MAS Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAS Gold Corp 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 Inc CDR are associated (or correlated) with MAS Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAS Gold Corp has no effect on the direction of Walmart i.e., Walmart and MAS Gold go up and down completely randomly.

Pair Corralation between Walmart and MAS Gold

Assuming the 90 days trading horizon Walmart is expected to generate 21.26 times less return on investment than MAS Gold. But when comparing it to its historical volatility, Walmart Inc CDR is 32.41 times less risky than MAS Gold. It trades about 0.21 of its potential returns per unit of risk. MAS Gold Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2.00  in MAS Gold Corp on September 23, 2024 and sell it today you would earn a total of  0.00  from holding MAS Gold Corp or generate 0.0% return on investment over 90 days.

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

Walmart Inc CDR  vs.  MAS Gold Corp

Walmart Inc CDR

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart Inc CDR are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Walmart displayed solid returns over the last few months and may actually be approaching a breakup point.

MAS Gold Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MAS Gold Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, MAS Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walmart and MAS Gold

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

The idea behind Walmart Inc CDR and MAS Gold Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.