Correlation Between Walmart and 26 Capital

Can any of the company-specific risk be diversified away by investing in both Walmart and 26 Capital 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 26 Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Walmart and 26 Capital Acquisition, you can compare the effects of market volatilities on Walmart and 26 Capital 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 26 Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and 26 Capital.

Diversification Opportunities for Walmart and 26 Capital

0.67

Correlation Coefficient

Walmart  26 Capital

Poor diversification

The 3 months correlation between Walmart and ADER is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and 26 Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 26 Capital Acquisition 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 26 Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 26 Capital Acquisition has no effect on the direction of Walmart i.e., Walmart and 26 Capital go up and down completely randomly.

Pair Corralation between Walmart and 26 Capital

If you would invest  8,057  in Walmart on September 28, 2024 and sell it today you would earn a total of  1,114  from holding Walmart or generate 13.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Walmart  vs.  26 Capital Acquisition

Walmart

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 15 (%) 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.

26 Capital Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 26 Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, 26 Capital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Walmart and 26 Capital

The main advantage of trading using opposite Walmart and 26 Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, 26 Capital 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 26 Capital will offset losses from the drop in 26 Capital's long position.

The idea behind Walmart and 26 Capital Acquisition 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 CEOs Directory module to screen CEOs from public companies around the world.