Correlation Between Walmart and Inflation-adjusted
Can any of the company-specific risk be diversified away by investing in both Walmart and Inflation-adjusted 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 Inflation-adjusted into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Inflation Adjusted Bond Fund, you can compare the effects of market volatilities on Walmart and Inflation-adjusted 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 Inflation-adjusted. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Inflation-adjusted.
Diversification Opportunities for Walmart and Inflation-adjusted
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and Inflation-adjusted is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Inflation Adjusted Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Adjusted Bond 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 Inflation-adjusted. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Adjusted Bond has no effect on the direction of Walmart i.e., Walmart and Inflation-adjusted go up and down completely randomly.
Pair Corralation between Walmart and Inflation-adjusted
Considering the 90-day investment horizon Walmart is expected to generate 3.61 times more return on investment than Inflation-adjusted. However, Walmart is 3.61 times more volatile than Inflation Adjusted Bond Fund. It trades about 0.17 of its potential returns per unit of risk. Inflation Adjusted Bond Fund is currently generating about 0.09 per unit of risk. If you would invest 5,423 in Walmart on September 1, 2024 and sell it today you would earn a total of 3,827 from holding Walmart or generate 70.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Walmart vs. Inflation Adjusted Bond Fund
Performance |
| Timeline |
| Walmart |
| Inflation Adjusted Bond |
Walmart and Inflation-adjusted Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Inflation-adjusted
The main advantage of trading using opposite Walmart and Inflation-adjusted positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Inflation-adjusted 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 Inflation-adjusted will offset losses from the drop in Inflation-adjusted's long position.| Walmart vs. Ingles Markets Incorporated | Walmart vs. Sendas Distribuidora SA | Walmart vs. Grocery Outlet Holding | Walmart vs. Ocado Group plc |
| Inflation-adjusted vs. Heartland Value Plus | Inflation-adjusted vs. Victory Rs Partners | Inflation-adjusted vs. Columbia Small Cap | Inflation-adjusted vs. Fpa Queens Road |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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