Correlation Between Veolia Environnement and Walmart

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

By analyzing existing cross correlation between Veolia Environnement SA and Walmart, you can compare the effects of market volatilities on Veolia Environnement and Walmart 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 Veolia Environnement with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veolia Environnement and Walmart.

Diversification Opportunities for Veolia Environnement and Walmart

0.4

Correlation Coefficient

Veolia Environnement  Walmart

Very weak diversification

The 3 months correlation between Veolia and Walmart is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Veolia Environnement SA and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Veolia Environnement 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 Veolia Environnement SA 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 Veolia Environnement i.e., Veolia Environnement and Walmart go up and down completely randomly.

Pair Corralation between Veolia Environnement and Walmart

Assuming the 90 days trading horizon Veolia Environnement SA is expected to under-perform the Walmart. In addition to that, Veolia Environnement is 1.1 times more volatile than Walmart. It trades about -0.01 of its total potential returns per unit of risk. Walmart is currently generating about 0.02 per unit of volatility. If you would invest  8,091  in Walmart on March 22, 2025 and sell it today you would earn a total of  109.00  from holding Walmart or generate 1.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Veolia Environnement SA  vs.  Walmart

Veolia Environnement

Risk-Adjusted Performance

Very Weak

Over the last 90 days Veolia Environnement SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Veolia Environnement is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Walmart

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Walmart is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Veolia Environnement and Walmart

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

The idea behind Veolia Environnement SA and Walmart 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.