Correlation Between Walmart and Innovator MSCI
Can any of the company-specific risk be diversified away by investing in both Walmart and Innovator 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 Innovator MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Innovator MSCI EAFE, you can compare the effects of market volatilities on Walmart and Innovator 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 Innovator MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Innovator MSCI.
Diversification Opportunities for Walmart and Innovator MSCI
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Innovator is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Innovator MSCI EAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator MSCI EAFE 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 Innovator MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator MSCI EAFE has no effect on the direction of Walmart i.e., Walmart and Innovator MSCI go up and down completely randomly.
Pair Corralation between Walmart and Innovator MSCI
Considering the 90-day investment horizon Walmart is expected to generate 2.21 times more return on investment than Innovator MSCI. However, Walmart is 2.21 times more volatile than Innovator MSCI EAFE. It trades about 0.53 of its potential returns per unit of risk. Innovator MSCI EAFE is currently generating about -0.06 per unit of risk. 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Innovator MSCI EAFE
Performance |
| Timeline |
| Walmart |
| Innovator MSCI EAFE |
Walmart and Innovator MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Innovator MSCI
The main advantage of trading using opposite Walmart and Innovator MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Innovator 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 Innovator MSCI will offset losses from the drop in Innovator MSCI's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Innovator MSCI vs. Innovator MSCI Emerging | Innovator MSCI vs. Innovator Russell 2000 | Innovator MSCI vs. Innovator SP 500 | Innovator MSCI vs. Innovator Nasdaq 100 Power |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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