Correlation Between Global Bond and Walmart

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Can any of the company-specific risk be diversified away by investing in both Global Bond 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 Global Bond and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Bond Fund and Walmart, you can compare the effects of market volatilities on Global Bond 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 Global Bond with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Bond and Walmart.

Diversification Opportunities for Global Bond and Walmart

  Correlation Coefficient

Very weak diversification

The 3 months correlation between Global and Walmart is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Global Bond Fund and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Global Bond 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 Global Bond Fund 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 Global Bond i.e., Global Bond and Walmart go up and down completely randomly.

Pair Corralation between Global Bond and Walmart

Assuming the 90 days horizon Global Bond is expected to generate 2.46 times less return on investment than Walmart. But when comparing it to its historical volatility, Global Bond Fund is 6.81 times less risky than Walmart. It trades about 0.22 of its potential returns per unit of risk. Walmart is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  12,821  in Walmart on May 17, 2022 and sell it today you would earn a total of  439.00  from holding Walmart or generate 3.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Global Bond Fund  vs.  Walmart

 Performance (%) 
Global Bond Fund 
Global Performance
0 of 100
Over the last 90 days Global Bond Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Global Bond is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Global Price Channel

Walmart Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, Walmart is not utilizing all of its potentials. The new stock price uproar, may contribute to short-horizon losses for the private investors.

Walmart Price Channel

Global Bond and Walmart Volatility Contrast

   Predicted Return Density   

Pair Trading with Global Bond and Walmart

The main advantage of trading using opposite Global Bond and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Bond 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.

Global Bond Fund

Pair trading matchups for Global Bond

The idea behind Global Bond Fund 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.
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 Stock Screener module to find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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