Correlation Between Walmart and Remy Cointreau

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

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

Diversification Opportunities for Walmart and Remy Cointreau

-0.51

Correlation Coefficient

Walmart  Remy Cointreau

Excellent diversification

The 3 months correlation between Walmart and Remy is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Remy Cointreau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remy Cointreau SA 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 Remy Cointreau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remy Cointreau SA has no effect on the direction of Walmart i.e., Walmart and Remy Cointreau go up and down completely randomly.

Pair Corralation between Walmart and Remy Cointreau

Considering the 90-day investment horizon Walmart is expected to generate 0.43 times more return on investment than Remy Cointreau. However, Walmart is 2.32 times less risky than Remy Cointreau. It trades about 0.25 of its potential returns per unit of risk. Remy Cointreau SA is currently generating about -0.01 per unit of risk. If you would invest  8,060  in Walmart on September 13, 2024 and sell it today you would earn a total of  1,436  from holding Walmart or generate 17.82% return on investment over 90 days.

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

Walmart  vs.  Remy Cointreau SA

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.

Remy Cointreau SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Remy Cointreau SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Remy Cointreau is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walmart and Remy Cointreau

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

The idea behind Walmart and Remy Cointreau SA 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.