Correlation Between Health Assurance and Walmart

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

Diversification Opportunities for Health Assurance and Walmart

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Health and Walmart is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Health Assurance Acquisition and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Health Assurance 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 Health Assurance Acquisition 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 Health Assurance i.e., Health Assurance and Walmart go up and down completely randomly.

Pair Corralation between Health Assurance and Walmart

Given the investment horizon of 90 days Health Assurance Acquisition is expected to generate 0.06 times more return on investment than Walmart. However, Health Assurance Acquisition is 16.08 times less risky than Walmart. It trades about 0.08 of its potential returns per unit of risk. Walmart is currently generating about 0.0 per unit of risk. If you would invest  978.00  in Health Assurance Acquisition on June 28, 2022 and sell it today you would earn a total of  20.00  from holding Health Assurance Acquisition or generate 2.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Health Assurance Acquisition  vs.  Walmart

 Performance (%) 
       Timeline  
Health Assurance Acq 
Health Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Health Assurance Acquisition are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Health Assurance is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Health Price Channel

Walmart 
Walmart Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady primary indicators, Walmart may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Walmart Price Channel

Health Assurance and Walmart Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Health Assurance and Walmart

The main advantage of trading using opposite Health Assurance and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Assurance 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.
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The idea behind Health Assurance Acquisition 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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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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