Correlation Between Walmart and Avantis All
Can any of the company-specific risk be diversified away by investing in both Walmart and Avantis All 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 Avantis All into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Avantis All Equity, you can compare the effects of market volatilities on Walmart and Avantis All 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 Avantis All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Avantis All.
Diversification Opportunities for Walmart and Avantis All
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walmart and Avantis is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Avantis All Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis All Equity 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 Avantis All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis All Equity has no effect on the direction of Walmart i.e., Walmart and Avantis All go up and down completely randomly.
Pair Corralation between Walmart and Avantis All
Considering the 90-day investment horizon Walmart is expected to generate 1.46 times more return on investment than Avantis All. However, Walmart is 1.46 times more volatile than Avantis All Equity. It trades about 0.54 of its potential returns per unit of risk. Avantis All Equity is currently generating about 0.33 per unit of risk. If you would invest 8,195 in Walmart on September 1, 2024 and sell it today you would earn a total of 1,055 from holding Walmart or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Walmart vs. Avantis All Equity
Performance |
| Timeline |
| Walmart |
| Avantis All Equity |
Walmart and Avantis All Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Avantis All
The main advantage of trading using opposite Walmart and Avantis All positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Avantis All 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 Avantis All will offset losses from the drop in Avantis All's long position.| Walmart vs. Ingles Markets Incorporated | Walmart vs. Grocery Outlet Holding | Walmart vs. Ocado Group plc | Walmart vs. Sprouts Farmers Market |
| Avantis All vs. Avantis Small Cap | Avantis All vs. Avantis International Small | Avantis All vs. Avantis Equity ETF | Avantis All vs. Avantis Emerging Markets |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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