Correlation Between Walmart and 111

Can any of the company-specific risk be diversified away by investing in both Walmart and 111 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 111 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Walmart and 111 Inc, you can compare the effects of market volatilities on Walmart and 111 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 111. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and 111.

Diversification Opportunities for Walmart and 111

-0.53

Correlation Coefficient

Walmart  111

Excellent diversification

The 3 months correlation between Walmart and 111 is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and 111 Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 111 Inc 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 111. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 111 Inc has no effect on the direction of Walmart i.e., Walmart and 111 go up and down completely randomly.

Pair Corralation between Walmart and 111

Considering the 90-day investment horizon Walmart is expected to generate 2.02 times less return on investment than 111. But when comparing it to its historical volatility, Walmart is 7.09 times less risky than 111. It trades about 0.18 of its potential returns per unit of risk. 111 Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  69.00  in 111 Inc on August 10, 2024 and sell it today you would earn a total of  4.00  from holding 111 Inc or generate 5.8% 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.  111 Inc

Walmart

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

111 Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 111 Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Walmart and 111

The main advantage of trading using opposite Walmart and 111 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, 111 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 111 will offset losses from the drop in 111's long position.

The idea behind Walmart and 111 Inc 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.