Correlation Between Dow Jones and WALMART
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By analyzing existing cross correlation between Dow Jones Industrial and WALMART INC 265, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of WALMART. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and WALMART.
Diversification Opportunities for Dow Jones and WALMART
Very good diversification
The 3 months correlation between Dow and WALMART is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and WALMART INC 265 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WALMART INC 265 and Dow Jones 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 Dow Jones Industrial 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 INC 265 has no effect on the direction of Dow Jones i.e., Dow Jones and WALMART go up and down completely randomly.
Pair Corralation between Dow Jones and WALMART
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 7.26 times more return on investment than WALMART. However, Dow Jones is 7.26 times more volatile than WALMART INC 265. It trades about 0.27 of its potential returns per unit of risk. WALMART INC 265 is currently generating about -0.1 per unit of risk. If you would invest 4,223,305 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 248,901 from holding Dow Jones Industrial or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Dow Jones Industrial vs. WALMART INC 265
Performance |
| Timeline |
Dow Jones and WALMART Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
WALMART INC 265
Pair trading matchups for WALMART
Pair Trading with Dow Jones and WALMART
The main advantage of trading using opposite Dow Jones and WALMART positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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