Correlation Between Walmart and Pingtan Marine

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

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

Diversification Opportunities for Walmart and Pingtan Marine

-0.56

Correlation Coefficient

Walmart  Pingtan Marine

Excellent diversification

The 3 months correlation between Walmart and Pingtan is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Pingtan Marine Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pingtan Marine Enterprise 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 Pingtan Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pingtan Marine Enterprise has no effect on the direction of Walmart i.e., Walmart and Pingtan Marine go up and down completely randomly.

Pair Corralation between Walmart and Pingtan Marine

If you would invest  6,708  in Walmart on September 15, 2024 and sell it today you would earn a total of  2,717  from holding Walmart or generate 40.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.79%
Values	Daily Returns

Walmart  vs.  Pingtan Marine Enterprise

Walmart

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 18 (%) 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.

Pingtan Marine Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pingtan Marine Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Pingtan Marine is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Walmart and Pingtan Marine

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

The idea behind Walmart and Pingtan Marine Enterprise 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.