Correlation Between Walmart and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Walmart and IShares 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 IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and iShares MSCI India, you can compare the effects of market volatilities on Walmart and IShares 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and IShares MSCI.
Diversification Opportunities for Walmart and IShares MSCI
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and IShares is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and iShares MSCI India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI India 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI India has no effect on the direction of Walmart i.e., Walmart and IShares MSCI go up and down completely randomly.
Pair Corralation between Walmart and IShares MSCI
Considering the 90-day investment horizon Walmart is expected to generate 1.3 times more return on investment than IShares MSCI. However, Walmart is 1.3 times more volatile than iShares MSCI India. It trades about 0.12 of its potential returns per unit of risk. iShares MSCI India is currently generating about 0.05 per unit of risk. If you would invest 4,963 in Walmart on August 23, 2024 and sell it today you would earn a total of 3,876 from holding Walmart or generate 78.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. iShares MSCI India
Performance |
| Timeline |
| Walmart |
| iShares MSCI India |
Walmart and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and IShares MSCI
The main advantage of trading using opposite Walmart and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, IShares 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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