Correlation Between Walmart and VanEck Fallen
Can any of the company-specific risk be diversified away by investing in both Walmart and VanEck Fallen 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 VanEck Fallen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and VanEck Fallen Angel, you can compare the effects of market volatilities on Walmart and VanEck Fallen 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 VanEck Fallen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and VanEck Fallen.
Diversification Opportunities for Walmart and VanEck Fallen
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walmart and VanEck is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and VanEck Fallen Angel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Fallen Angel 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 VanEck Fallen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Fallen Angel has no effect on the direction of Walmart i.e., Walmart and VanEck Fallen go up and down completely randomly.
Pair Corralation between Walmart and VanEck Fallen
Considering the 90-day investment horizon Walmart is expected to generate 2.94 times more return on investment than VanEck Fallen. However, Walmart is 2.94 times more volatile than VanEck Fallen Angel. It trades about 0.15 of its potential returns per unit of risk. VanEck Fallen Angel is currently generating about 0.11 per unit of risk. If you would invest 4,780 in Walmart on November 9, 2024 and sell it today you would earn a total of 5,505 from holding Walmart or generate 115.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. VanEck Fallen Angel
Performance |
| Timeline |
| Walmart |
| VanEck Fallen Angel |
Walmart and VanEck Fallen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and VanEck Fallen
The main advantage of trading using opposite Walmart and VanEck Fallen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, VanEck Fallen 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 VanEck Fallen will offset losses from the drop in VanEck Fallen's long position.| Walmart vs. Great Western Minerals | Walmart vs. Enterprise Bancorp | Walmart vs. T Rowe Price | Walmart vs. Aviat Networks |
| VanEck Fallen vs. iShares Fallen Angels | VanEck Fallen vs. VanEck Emerging Markets | VanEck Fallen vs. First Trust Multi Asset | VanEck Fallen vs. iShares 0 5 Year |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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