Correlation Between Walmart and Gabelli Dividend

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

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

Diversification Opportunities for Walmart and Gabelli Dividend

0.82

Correlation Coefficient

Walmart  Gabelli Dividend

Very poor diversification

The 3 months correlation between Walmart and Gabelli is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Gabelli Dividend Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Dividend Income 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 Gabelli Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Dividend Income has no effect on the direction of Walmart i.e., Walmart and Gabelli Dividend go up and down completely randomly.

Pair Corralation between Walmart and Gabelli Dividend

Considering the 90-day investment horizon Walmart is expected to generate 1.22 times more return on investment than Gabelli Dividend. However, Walmart is 1.22 times more volatile than Gabelli Dividend Income. It trades about 0.13 of its potential returns per unit of risk. Gabelli Dividend Income is currently generating about 0.07 per unit of risk. If you would invest  4,796  in Walmart on September 3, 2024 and sell it today you would earn a total of  4,454  from holding Walmart or generate 92.87% return on investment over 90 days.

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

Walmart  vs.  Gabelli Dividend Income

Walmart

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 21 (%) 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.

Gabelli Dividend Income

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Dividend Income are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly uncertain fundamental indicators, Gabelli Dividend may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Walmart and Gabelli Dividend

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

The idea behind Walmart and Gabelli Dividend Income 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.