Correlation Between Walmart and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Walmart and IShares MSCI 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 IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and iShares MSCI USA, you can compare the effects of market volatilities on Walmart and IShares MSCI 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and IShares MSCI.
Diversification Opportunities for Walmart and IShares MSCI
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Walmart and IShares is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and iShares MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI USA 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI USA has no effect on the direction of Walmart i.e., Walmart and IShares MSCI go up and down completely randomly.
Pair Corralation between Walmart and IShares MSCI
Considering the 90-day investment horizon Walmart is expected to under-perform the IShares MSCI. In addition to that, Walmart is 3.06 times more volatile than iShares MSCI USA. It trades about -0.09 of its total potential returns per unit of risk. iShares MSCI USA is currently generating about -0.13 per unit of volatility. If you would invest 9,949 in iShares MSCI USA on November 27, 2024 and sell it today you would lose (160.00) from holding iShares MSCI USA or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. iShares MSCI USA
Performance |
| Timeline |
| Walmart |
| iShares MSCI USA |
Walmart and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and IShares MSCI
The main advantage of trading using opposite Walmart and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| Walmart vs. Target | Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield | Walmart vs. Morningstar Unconstrained Allocation |
| IShares MSCI vs. iShares Russell Top | IShares MSCI vs. iShares Russell Top | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI Ireland |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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