Correlation Between Walmart and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Walmart and Dodge Cox 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 Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Dodge Income Fund, you can compare the effects of market volatilities on Walmart and Dodge Cox 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 Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Dodge Cox.
Diversification Opportunities for Walmart and Dodge Cox
Excellent diversification
The 3 months correlation between Walmart and Dodge is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Dodge Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Income 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 Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Income has no effect on the direction of Walmart i.e., Walmart and Dodge Cox go up and down completely randomly.
Pair Corralation between Walmart and Dodge Cox
Considering the 90-day investment horizon Walmart is expected to generate 2.71 times more return on investment than Dodge Cox. However, Walmart is 2.71 times more volatile than Dodge Income Fund. It trades about 0.15 of its potential returns per unit of risk. Dodge Income Fund is currently generating about 0.04 per unit of risk. If you would invest 4,574 in Walmart on August 27, 2024 and sell it today you would earn a total of 4,470 from holding Walmart or generate 97.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Dodge Income Fund
Performance |
| Timeline |
| Walmart |
| Dodge Income |
Walmart and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Dodge Cox
The main advantage of trading using opposite Walmart and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Dodge Cox 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 Dodge Cox will offset losses from the drop in Dodge Cox's long position.| Walmart vs. Innovative Food Hldg | Walmart vs. Calavo Growers | Walmart vs. The Chefs Warehouse | Walmart vs. AMCON Distributing |
| Dodge Cox vs. Dodge International Stock | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Harbor Bond Fund |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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