Correlation Between Walmart and A3 Alternative

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Can any of the company-specific risk be diversified away by investing in both Walmart and A3 Alternative 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 A3 Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and A3 Alternative Credit, you can compare the effects of market volatilities on Walmart and A3 Alternative 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 A3 Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and A3 Alternative.

Diversification Opportunities for Walmart and A3 Alternative

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between Walmart and AAACX is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and A3 Alternative Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A3 Alternative Credit 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 A3 Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A3 Alternative Credit has no effect on the direction of Walmart i.e., Walmart and A3 Alternative go up and down completely randomly.

Pair Corralation between Walmart and A3 Alternative

Considering the 90-day investment horizon Walmart is expected to generate 3.87 times more return on investment than A3 Alternative. However, Walmart is 3.87 times more volatile than A3 Alternative Credit. It trades about 0.01 of its potential returns per unit of risk. A3 Alternative Credit is currently generating about -0.24 per unit of risk. If you would invest  13,234  in Walmart on July 6, 2022 and sell it today you would earn a total of  19.00  from holding Walmart or generate 0.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Walmart  vs.  A3 Alternative Credit

 Performance (%) 
       Timeline  
Walmart 
Walmart Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting primary indicators, Walmart may actually be approaching a critical reversion point that can send shares even higher in November 2022.

Walmart Price Channel

A3 Alternative Credit 
AAACX Performance
0 of 100
Over the last 90 days A3 Alternative Credit has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, A3 Alternative is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

AAACX Price Channel

Walmart and A3 Alternative Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walmart and A3 Alternative

The main advantage of trading using opposite Walmart and A3 Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, A3 Alternative 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 A3 Alternative will offset losses from the drop in A3 Alternative's long position.
Walmart vs. Amazon Inc
The idea behind Walmart and A3 Alternative Credit 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.
A3 Alternative vs. Microsoft Corp
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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