Correlation Between Walmart and Greenshift Corp

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

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

Diversification Opportunities for Walmart and Greenshift Corp

-0.35

Correlation Coefficient

Walmart  Greenshift Corp

Very good diversification

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

Pair Corralation between Walmart and Greenshift Corp

Considering the 90-day investment horizon Walmart is expected to generate 1.55 times less return on investment than Greenshift Corp. But when comparing it to its historical volatility, Walmart is 10.28 times less risky than Greenshift Corp. It trades about 0.25 of its potential returns per unit of risk. Greenshift Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Greenshift Corp on September 13, 2024 and sell it today you would lose (0.35) from holding Greenshift Corp or give up 11.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Walmart  vs.  Greenshift Corp

Walmart

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 19 (%) 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.

Greenshift Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Greenshift Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Greenshift Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walmart and Greenshift Corp

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

The idea behind Walmart and Greenshift 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.