Correlation Between Walmart and General Electric

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

Diversification Opportunities for Walmart and General Electric

0.32
  Correlation Coefficient

Weak diversification

The 3 months correlation between Walmart and General is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and General Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Electric 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 General Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Electric has no effect on the direction of Walmart i.e., Walmart and General Electric go up and down completely randomly.

Pair Corralation between Walmart and General Electric

Considering the 90-day investment horizon Walmart is expected to generate 0.69 times more return on investment than General Electric. However, Walmart is 1.44 times less risky than General Electric. It trades about 0.0 of its potential returns per unit of risk. General Electric is currently generating about -0.04 per unit of risk. If you would invest  13,508  in Walmart on May 12, 2022 and sell it today you would lose (595.00)  from holding Walmart or give up 4.4% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Walmart  vs.  General Electric

 Performance (%) 
       Timeline  
Walmart 
Walmart Performance
0 of 100
Over the last 90 days Walmart has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Walmart Price Channel

General Electric 
General Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in General Electric are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, General Electric is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

General Price Channel

Walmart and General Electric Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walmart and General Electric

The main advantage of trading using opposite Walmart and General Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, General Electric 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 General Electric will offset losses from the drop in General Electric's long position.
The idea behind Walmart and General Electric 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

Other Complementary Tools

My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go