Correlation Between Digital Realty and Walmart
Can any of the company-specific risk be diversified away by investing in both Digital Realty 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 Digital Realty and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Realty Trust and Walmart, you can compare the effects of market volatilities on Digital Realty 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 Digital Realty with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Realty and Walmart.
Diversification Opportunities for Digital Realty and Walmart
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digital and Walmart is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Digital Realty Trust and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Digital Realty 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 Digital Realty Trust 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 Digital Realty i.e., Digital Realty and Walmart go up and down completely randomly.
Pair Corralation between Digital Realty and Walmart
If you would invest 5,960 in Walmart on October 30, 2024 and sell it today you would earn a total of 0.00 from holding Walmart or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Digital Realty Trust vs. Walmart
Performance |
| Timeline |
| Digital Realty Trust |
| Walmart |
Digital Realty and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Realty and Walmart
The main advantage of trading using opposite Digital Realty and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Realty 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.| Digital Realty vs. Ebro Foods | Digital Realty vs. National Beverage Corp | Digital Realty vs. Symphony Environmental Technologies | Digital Realty vs. Premier Foods PLC |
| Walmart vs. LBG Media PLC | Walmart vs. Centaur Media | Walmart vs. Intermediate Capital Group | Walmart vs. Seche Environnement SA |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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