Correlation Between Walmart and Dreyfus Global
Can any of the company-specific risk be diversified away by investing in both Walmart and Dreyfus Global 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 Dreyfus Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Dreyfus Global Real, you can compare the effects of market volatilities on Walmart and Dreyfus Global 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 Dreyfus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Dreyfus Global.
Diversification Opportunities for Walmart and Dreyfus Global
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walmart and Dreyfus is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Dreyfus Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Global Real 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 Dreyfus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Global Real has no effect on the direction of Walmart i.e., Walmart and Dreyfus Global go up and down completely randomly.
Pair Corralation between Walmart and Dreyfus Global
Considering the 90-day investment horizon Walmart is expected to generate 3.05 times more return on investment than Dreyfus Global. However, Walmart is 3.05 times more volatile than Dreyfus Global Real. It trades about 0.16 of its potential returns per unit of risk. Dreyfus Global Real is currently generating about 0.1 per unit of risk. If you would invest 5,161 in Walmart on September 12, 2024 and sell it today you would earn a total of 4,294 from holding Walmart or generate 83.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Walmart vs. Dreyfus Global Real
Performance |
| Timeline |
| Walmart |
| Dreyfus Global Real |
Walmart and Dreyfus Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Dreyfus Global
The main advantage of trading using opposite Walmart and Dreyfus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Dreyfus Global 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 Dreyfus Global will offset losses from the drop in Dreyfus Global's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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