Correlation Between Walmart and GVS SPA

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

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

Diversification Opportunities for Walmart and GVS SPA

-0.55

Correlation Coefficient

Walmart  GVS SPA

Excellent diversification

The 3 months correlation between Walmart and GVS is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and GVS SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GVS SPA 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 GVS SPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GVS SPA has no effect on the direction of Walmart i.e., Walmart and GVS SPA go up and down completely randomly.

Pair Corralation between Walmart and GVS SPA

Assuming the 90 days trading horizon Walmart is expected to under-perform the GVS SPA. But the stock apears to be less risky and, when comparing its historical volatility, Walmart is 2.21 times less risky than GVS SPA. The stock trades about -0.03 of its potential returns per unit of risk. The GVS SPA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  405.00  in GVS SPA on April 25, 2025 and sell it today you would earn a total of  93.00  from holding GVS SPA or generate 22.96% return on investment over 90 days.

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

Walmart  vs.  GVS SPA

Walmart

Risk-Adjusted Performance

Very Weak

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

GVS SPA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GVS SPA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GVS SPA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walmart and GVS SPA

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

The idea behind Walmart and GVS SPA 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.