Correlation Between Walmart and IPath Global
Can any of the company-specific risk be diversified away by investing in both Walmart and IPath 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 IPath Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and IPath Global Carbon, you can compare the effects of market volatilities on Walmart and IPath 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 IPath Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and IPath Global.
Diversification Opportunities for Walmart and IPath Global
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and IPath is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and IPath Global Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IPath Global Carbon 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 IPath Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IPath Global Carbon has no effect on the direction of Walmart i.e., Walmart and IPath Global go up and down completely randomly.
Pair Corralation between Walmart and IPath Global
If you would invest 8,275 in Walmart on August 27, 2024 and sell it today you would earn a total of 675.00 from holding Walmart or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Walmart vs. IPath Global Carbon
Performance |
| Timeline |
| Walmart |
| IPath Global Carbon |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and IPath Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and IPath Global
The main advantage of trading using opposite Walmart and IPath Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, IPath 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 IPath Global will offset losses from the drop in IPath Global's long position.| Walmart vs. Innovative Food Hldg | Walmart vs. Calavo Growers | Walmart vs. The Chefs Warehouse | Walmart vs. AMCON Distributing |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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