Correlation Between Walmart and Ollies Bargain

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

Diversification Opportunities for Walmart and Ollies Bargain

-0.3
  Correlation Coefficient

Very good diversification

The 3 months correlation between Walmart and Ollies is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Ollies Bargain CS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ollies Bargain CS 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 Ollies Bargain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ollies Bargain CS has no effect on the direction of Walmart i.e., Walmart and Ollies Bargain go up and down completely randomly.

Pair Corralation between Walmart and Ollies Bargain

Considering the 90-day investment horizon Walmart is expected to generate 0.4 times more return on investment than Ollies Bargain. However, Walmart is 2.49 times less risky than Ollies Bargain. It trades about -0.13 of its potential returns per unit of risk. Ollies Bargain CS is currently generating about -0.08 per unit of risk. If you would invest  13,448  in Walmart on July 3, 2022 and sell it today you would lose (478.00)  from holding Walmart or give up 3.55% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Walmart  vs.  Ollies Bargain CS

 Performance (%) 
       Timeline  
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

Ollies Bargain CS 
Ollies Performance
0 of 100
Over the last 90 days Ollies Bargain CS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Ollies Price Channel

Walmart and Ollies Bargain Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walmart and Ollies Bargain

The main advantage of trading using opposite Walmart and Ollies Bargain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Ollies Bargain 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 Ollies Bargain will offset losses from the drop in Ollies Bargain's long position.
Walmart vs. Amazon Inc
The idea behind Walmart and Ollies Bargain CS 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.
Ollies Bargain vs. Amazon Inc
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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