Correlation Between Walmart and Ameritrust Corp

Can any of the company-specific risk be diversified away by investing in both Walmart and Ameritrust Corp 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 Ameritrust Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Walmart and Ameritrust Corp, you can compare the effects of market volatilities on Walmart and Ameritrust Corp 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 Ameritrust Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Ameritrust Corp.

Diversification Opportunities for Walmart and Ameritrust Corp

0.0

Correlation Coefficient

Walmart  Ameritrust Corp

Pay attention - limited upside

The 3 months correlation between Walmart and Ameritrust is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Ameritrust Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameritrust Corp 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 Ameritrust Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameritrust Corp has no effect on the direction of Walmart i.e., Walmart and Ameritrust Corp go up and down completely randomly.

Pair Corralation between Walmart and Ameritrust Corp

If you would invest  0.02  in Ameritrust Corp on January 24, 2024 and sell it today you would earn a total of  0.00  from holding Ameritrust Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Walmart  vs.  Ameritrust Corp

Walmart

Risk-Adjusted Performance

18 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Walmart may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Ameritrust Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ameritrust Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Ameritrust Corp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Walmart and Ameritrust Corp

The main advantage of trading using opposite Walmart and Ameritrust Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Ameritrust Corp 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 Ameritrust Corp will offset losses from the drop in Ameritrust Corp's long position.

The idea behind Walmart and Ameritrust Corp 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.

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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 the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.