Correlation Between Walmart and Ocuphire Pharma

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

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

Diversification Opportunities for Walmart and Ocuphire Pharma

-0.46

Correlation Coefficient

Walmart  Ocuphire Pharma

Very good diversification

The 3 months correlation between Walmart and Ocuphire is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Ocuphire Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocuphire Pharma 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 Ocuphire Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocuphire Pharma has no effect on the direction of Walmart i.e., Walmart and Ocuphire Pharma go up and down completely randomly.

Pair Corralation between Walmart and Ocuphire Pharma

Considering the 90-day investment horizon Walmart is expected to generate 0.28 times more return on investment than Ocuphire Pharma. However, Walmart is 3.53 times less risky than Ocuphire Pharma. It trades about 0.26 of its potential returns per unit of risk. Ocuphire Pharma is currently generating about -0.07 per unit of risk. If you would invest  7,966  in Walmart on September 12, 2024 and sell it today you would earn a total of  1,530  from holding Walmart or generate 19.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	50.0%
Values	Daily Returns

Walmart  vs.  Ocuphire Pharma

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 uncertain primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ocuphire Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocuphire Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Walmart and Ocuphire Pharma

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

The idea behind Walmart and Ocuphire Pharma 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.