Correlation Between Ross Stores and Walmart

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ross Stores 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 Ross Stores and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and Walmart, you can compare the effects of market volatilities on Ross Stores 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 Ross Stores with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and Walmart.

Diversification Opportunities for Ross Stores and Walmart

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Ross Stores and Walmart is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Ross Stores 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 Ross Stores 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 Ross Stores i.e., Ross Stores and Walmart go up and down completely randomly.

Pair Corralation between Ross Stores and Walmart

Given the investment horizon of 90 days Ross Stores is expected to under-perform the Walmart. In addition to that, Ross Stores is 1.91 times more volatile than Walmart. It trades about -0.06 of its total potential returns per unit of risk. Walmart is currently generating about -0.04 per unit of volatility. If you would invest  13,160  in Walmart on June 27, 2022 and sell it today you would lose (154.00)  from holding Walmart or give up 1.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Ross Stores  vs.  Walmart

 Performance (%) 
       Timeline  
Ross Stores 
Ross Stores Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Ross Stores are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Ross Stores may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Ross Stores Price Channel

Walmart 
Walmart Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 3 (%) 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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Walmart Price Channel

Ross Stores and Walmart Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ross Stores and Walmart

The main advantage of trading using opposite Ross Stores and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores 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.
Ross Stores vs. Industrias Bachoco SA
The idea behind Ross Stores 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.
Walmart vs. BUSHVELD MINERALS LTD
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

Other Complementary Tools

Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go