Correlation Between Walmart and WisdomTree
Can any of the company-specific risk be diversified away by investing in both Walmart and WisdomTree 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 WisdomTree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and WisdomTree, you can compare the effects of market volatilities on Walmart and WisdomTree 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 WisdomTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and WisdomTree.
Diversification Opportunities for Walmart and WisdomTree
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Walmart and WisdomTree is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and WisdomTree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree 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 WisdomTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree has no effect on the direction of Walmart i.e., Walmart and WisdomTree go up and down completely randomly.
Pair Corralation between Walmart and WisdomTree
If you would invest 8,139 in Walmart on August 31, 2024 and sell it today you would earn a total of 1,049 from holding Walmart or generate 12.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
Walmart vs. WisdomTree
Performance |
| Timeline |
| Walmart |
| WisdomTree |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walmart and WisdomTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and WisdomTree
The main advantage of trading using opposite Walmart and WisdomTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, WisdomTree 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 WisdomTree will offset losses from the drop in WisdomTree's long position.| Walmart vs. Dollar General | Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield | Walmart vs. Morningstar Unconstrained Allocation |
| WisdomTree vs. Blackrock Floating Rate | WisdomTree vs. Eaton Vance Senior | WisdomTree vs. Eaton Vance Senior | WisdomTree vs. Blackrock Debt Strategies |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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