Correlation Between Walmart and Money Market
Can any of the company-specific risk be diversified away by investing in both Walmart and Money Market 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 Money Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Money Market Obligations, you can compare the effects of market volatilities on Walmart and Money Market 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 Money Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Money Market.
Diversification Opportunities for Walmart and Money Market
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walmart and Money is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Money Market Obligations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Money Market Obligations 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 Money Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Money Market Obligations has no effect on the direction of Walmart i.e., Walmart and Money Market go up and down completely randomly.
Pair Corralation between Walmart and Money Market
If you would invest 8,219 in Walmart on September 2, 2024 and sell it today you would earn a total of 1,031 from holding Walmart or generate 12.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Money Market Obligations
Performance |
| Timeline |
| Walmart |
| Money Market Obligations |
Walmart and Money Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Money Market
The main advantage of trading using opposite Walmart and Money Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Money Market 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 Money Market will offset losses from the drop in Money Market's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Money Market vs. Vanguard Total Stock | Money Market vs. Vanguard 500 Index | Money Market vs. Vanguard Total Stock | Money Market vs. Vanguard Total Stock |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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