Correlation Between Walmart and Live Current

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

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

Diversification Opportunities for Walmart and Live Current

-0.32

Correlation Coefficient

Walmart  Live Current

Very good diversification

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

Pair Corralation between Walmart and Live Current

Considering the 90-day investment horizon Walmart is expected to generate 4.79 times less return on investment than Live Current. But when comparing it to its historical volatility, Walmart is 17.23 times less risky than Live Current. It trades about 0.07 of its potential returns per unit of risk. Live Current Media is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  20.00  in Live Current Media on February 15, 2024 and sell it today you would lose (19.99) from holding Live Current Media or give up 99.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Walmart  vs.  Live Current Media

Walmart

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Walmart may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Live Current Media

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Walmart and Live Current

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

The idea behind Walmart and Live Current Media 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.