Correlation Between Walmart and Global X
Can any of the company-specific risk be diversified away by investing in both Walmart and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Global X DAX, you can compare the effects of market volatilities on Walmart and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Global X.
Diversification Opportunities for Walmart and Global X
Very good diversification
The 3 months correlation between Walmart and Global is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Global X DAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X DAX 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X DAX has no effect on the direction of Walmart i.e., Walmart and Global X go up and down completely randomly.
Pair Corralation between Walmart and Global X
Considering the 90-day investment horizon Walmart is expected to generate 1.01 times more return on investment than Global X. However, Walmart is 1.01 times more volatile than Global X DAX. It trades about 0.41 of its potential returns per unit of risk. Global X DAX is currently generating about -0.18 per unit of risk. If you would invest 8,251 in Walmart on August 26, 2024 and sell it today you would earn a total of 793.00 from holding Walmart or generate 9.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Global X DAX
Performance |
| Timeline |
| Walmart |
| Global X DAX |
Walmart and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Global X
The main advantage of trading using opposite Walmart and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Global X vs. Camden National | Global X vs. iShares MSCI Germany | Global X vs. SPDR EURO STOXX | Global X vs. iShares MSCI France |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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