Correlation Between Walmart and DoubleLine Shiller
Can any of the company-specific risk be diversified away by investing in both Walmart and DoubleLine Shiller 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 DoubleLine Shiller into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and DoubleLine Shiller CAPE, you can compare the effects of market volatilities on Walmart and DoubleLine Shiller 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 DoubleLine Shiller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and DoubleLine Shiller.
Diversification Opportunities for Walmart and DoubleLine Shiller
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Walmart and DoubleLine is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and DoubleLine Shiller CAPE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoubleLine Shiller CAPE 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 DoubleLine Shiller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DoubleLine Shiller CAPE has no effect on the direction of Walmart i.e., Walmart and DoubleLine Shiller go up and down completely randomly.
Pair Corralation between Walmart and DoubleLine Shiller
Considering the 90-day investment horizon Walmart is expected to generate 1.53 times more return on investment than DoubleLine Shiller. However, Walmart is 1.53 times more volatile than DoubleLine Shiller CAPE. It trades about 0.52 of its potential returns per unit of risk. DoubleLine Shiller CAPE is currently generating about 0.58 per unit of risk. If you would invest 8,245 in Walmart on September 4, 2024 and sell it today you would earn a total of 1,019 from holding Walmart or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Walmart vs. DoubleLine Shiller CAPE
Performance |
| Timeline |
| Walmart |
| DoubleLine Shiller CAPE |
Walmart and DoubleLine Shiller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and DoubleLine Shiller
The main advantage of trading using opposite Walmart and DoubleLine Shiller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, DoubleLine Shiller 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 DoubleLine Shiller will offset losses from the drop in DoubleLine Shiller's long position.| Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield | Walmart vs. Morningstar Unconstrained Allocation | Walmart vs. Via Renewables |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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