Correlation Between Walmart and Arrow ETF
Can any of the company-specific risk be diversified away by investing in both Walmart and Arrow ETF 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 Arrow ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Arrow ETF Trust, you can compare the effects of market volatilities on Walmart and Arrow ETF 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 Arrow ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Arrow ETF.
Diversification Opportunities for Walmart and Arrow ETF
Very good diversification
The 3 months correlation between Walmart and Arrow is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Arrow ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow ETF Trust 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 Arrow ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow ETF Trust has no effect on the direction of Walmart i.e., Walmart and Arrow ETF go up and down completely randomly.
Pair Corralation between Walmart and Arrow ETF
Considering the 90-day investment horizon Walmart is expected to generate 2.97 times more return on investment than Arrow ETF. However, Walmart is 2.97 times more volatile than Arrow ETF Trust. It trades about 0.54 of its potential returns per unit of risk. Arrow ETF Trust is currently generating about 0.17 per unit of risk. If you would invest 8,195 in Walmart on September 1, 2024 and sell it today you would earn a total of 1,055 from holding Walmart or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Arrow ETF Trust
Performance |
| Timeline |
| Walmart |
| Arrow ETF Trust |
Walmart and Arrow ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Arrow ETF
The main advantage of trading using opposite Walmart and Arrow ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Arrow ETF 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 Arrow ETF will offset losses from the drop in Arrow ETF's long position.| Walmart vs. Ingles Markets Incorporated | Walmart vs. Grocery Outlet Holding | Walmart vs. Ocado Group plc | Walmart vs. Sprouts Farmers Market |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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