Correlation Between Walmart and Delivra Health

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

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

Diversification Opportunities for Walmart and Delivra Health

-0.83

Correlation Coefficient

Walmart  Delivra Health

Pay attention - limited upside

The 3 months correlation between Walmart and Delivra is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Delivra Health Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delivra Health Brands 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 Delivra Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delivra Health Brands has no effect on the direction of Walmart i.e., Walmart and Delivra Health go up and down completely randomly.

Pair Corralation between Walmart and Delivra Health

Considering the 90-day investment horizon Walmart is expected to generate 0.11 times more return on investment than Delivra Health. However, Walmart is 9.14 times less risky than Delivra Health. It trades about 0.32 of its potential returns per unit of risk. Delivra Health Brands is currently generating about -0.03 per unit of risk. If you would invest  7,787  in Walmart on September 19, 2024 and sell it today you would earn a total of  1,755  from holding Walmart or generate 22.54% return on investment over 90 days.

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

Walmart  vs.  Delivra Health Brands

Walmart

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 25 (%) 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.

Delivra Health Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delivra Health Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Walmart and Delivra Health

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

The idea behind Walmart and Delivra Health Brands 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.