Correlation Between Walmart and Altura Mining

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

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

Diversification Opportunities for Walmart and Altura Mining

-0.39

Correlation Coefficient

Walmart  Altura Mining

Very good diversification

The 3 months correlation between Walmart and Altura is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Altura Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altura Mining Limited 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 Altura Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altura Mining Limited has no effect on the direction of Walmart i.e., Walmart and Altura Mining go up and down completely randomly.

Pair Corralation between Walmart and Altura Mining

Considering the 90-day investment horizon Walmart is expected to generate 46.75 times less return on investment than Altura Mining. But when comparing it to its historical volatility, Walmart is 121.49 times less risky than Altura Mining. It trades about 0.26 of its potential returns per unit of risk. Altura Mining Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2.20  in Altura Mining Limited on August 31, 2024 and sell it today you would lose (1.67) from holding Altura Mining Limited or give up 75.91% of portfolio value over 90 days.

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

Walmart  vs.  Altura Mining Limited

Walmart

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

Altura Mining Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Altura Mining Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Altura Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walmart and Altura Mining

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

The idea behind Walmart and Altura Mining Limited 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.