Pair Correlation Between Big Lots and Walmart

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