Correlation Between Walmart and Chevron Corp

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

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

Diversification Opportunities for Walmart and Chevron Corp

0.0

Correlation Coefficient

Walmart  Chevron Corp

Pay attention - limited upside

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

Pair Corralation between Walmart and Chevron Corp

If you would invest  990,000  in Chevron Corp CEDEAR on April 22, 2025 and sell it today you would earn a total of  215,000  from holding Chevron Corp CEDEAR or generate 21.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Walmart  vs.  Chevron Corp CEDEAR

Walmart

Risk-Adjusted Performance

OK

Over the last 90 days Walmart has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Walmart is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Chevron Corp CEDEAR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chevron Corp CEDEAR are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Chevron Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walmart and Chevron Corp

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

The idea behind Walmart and Chevron Corp CEDEAR 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.

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 the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.