Correlation Between WALMART and Dow Jones
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By analyzing existing cross correlation between WALMART INC 65 and Dow Jones Industrial, you can compare the effects of market volatilities on WALMART and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of WALMART and Dow Jones.
Diversification Opportunities for WALMART and Dow Jones
Excellent diversification
The 3 months correlation between WALMART and Dow is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding WALMART INC 65 and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 INC 65 are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of WALMART i.e., WALMART and Dow Jones go up and down completely randomly.
Pair Corralation between WALMART and Dow Jones
Assuming the 90 days trading horizon WALMART INC 65 is expected to under-perform the Dow Jones. In addition to that, WALMART is 1.49 times more volatile than Dow Jones Industrial. It trades about -0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,347,646 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 1,124,560 from holding Dow Jones Industrial or generate 33.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.15% |
| Values | Daily Returns |
WALMART INC 65 vs. Dow Jones Industrial
Performance |
| Timeline |
WALMART and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
WALMART INC 65
Pair trading matchups for WALMART
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with WALMART and Dow Jones
The main advantage of trading using opposite WALMART and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WALMART position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| WALMART vs. Under Armour C | WALMART vs. Minerals Technologies | WALMART vs. American Eagle Outfitters | WALMART vs. Kaiser Aluminum |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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