Correlation Between Walmart and VanEck Steel

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

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

Diversification Opportunities for Walmart and VanEck Steel

-0.27

Correlation Coefficient

Walmart  VanEck Steel

Very good diversification

The 3 months correlation between Walmart and VanEck is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and VanEck Steel ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Steel ETF 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 VanEck Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Steel ETF has no effect on the direction of Walmart i.e., Walmart and VanEck Steel go up and down completely randomly.

Pair Corralation between Walmart and VanEck Steel

Considering the 90-day investment horizon Walmart is expected to under-perform the VanEck Steel. But the stock apears to be less risky and, when comparing its historical volatility, Walmart is 1.55 times less risky than VanEck Steel. The stock trades about -0.01 of its potential returns per unit of risk. The VanEck Steel ETF is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  6,180  in VanEck Steel ETF on May 5, 2025 and sell it today you would earn a total of  517.00  from holding VanEck Steel ETF or generate 8.37% return on investment over 90 days.

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

Walmart  vs.  VanEck Steel ETF

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.

VanEck Steel ETF

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Steel ETF are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady essential indicators, VanEck Steel may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Walmart and VanEck Steel

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

The idea behind Walmart and VanEck Steel ETF 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.