Correlation Between Walmart and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both Walmart and ProShares Trust 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 ProShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and ProShares Trust , you can compare the effects of market volatilities on Walmart and ProShares Trust 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 ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and ProShares Trust.
Diversification Opportunities for Walmart and ProShares Trust
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and ProShares is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust 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 ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of Walmart i.e., Walmart and ProShares Trust go up and down completely randomly.
Pair Corralation between Walmart and ProShares Trust
Considering the 90-day investment horizon Walmart is expected to generate 0.59 times more return on investment than ProShares Trust. However, Walmart is 1.71 times less risky than ProShares Trust. It trades about 0.57 of its potential returns per unit of risk. ProShares Trust is currently generating about 0.22 per unit of risk. If you would invest 9,194 in Walmart on November 18, 2024 and sell it today you would earn a total of 1,210 from holding Walmart or generate 13.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. ProShares Trust
Performance |
| Timeline |
| Walmart |
| ProShares Trust |
Walmart and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and ProShares Trust
The main advantage of trading using opposite Walmart and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, ProShares Trust 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 ProShares Trust will offset losses from the drop in ProShares Trust's long position.| Walmart vs. BJs Wholesale Club | Walmart vs. Dollar General | Walmart vs. Grocery Outlet Holding | Walmart vs. Kroger Company |
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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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