Correlation Between Vaalco Energy and Walmart

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

By analyzing existing cross correlation between Vaalco Energy and Walmart, you can compare the effects of market volatilities on Vaalco Energy and Walmart 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 Vaalco Energy with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaalco Energy and Walmart.

Diversification Opportunities for Vaalco Energy and Walmart

-0.38

Correlation Coefficient

Vaalco Energy  Walmart

Very good diversification

The 3 months correlation between Vaalco and Walmart is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Vaalco Energy and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Vaalco Energy 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 Vaalco Energy are associated (or correlated) with Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Vaalco Energy i.e., Vaalco Energy and Walmart go up and down completely randomly.

Pair Corralation between Vaalco Energy and Walmart

Considering the 90-day investment horizon Vaalco Energy is expected to generate 3.09 times more return on investment than Walmart. However, Vaalco Energy is 3.09 times more volatile than Walmart. It trades about 0.07 of its potential returns per unit of risk. Walmart is currently generating about 0.01 per unit of risk. If you would invest  325.00  in Vaalco Energy on May 6, 2025 and sell it today you would earn a total of  34.00  from holding Vaalco Energy or generate 10.46% return on investment over 90 days.

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

Vaalco Energy  vs.  Walmart

Vaalco Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vaalco Energy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Vaalco Energy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Walmart

Risk-Adjusted Performance

Very Weak

Over the last 90 days Walmart has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Walmart is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vaalco Energy and Walmart

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

The idea behind Vaalco Energy and Walmart 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.