Correlation Between Walmart and IShares Core
Can any of the company-specific risk be diversified away by investing in both Walmart and IShares Core 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 Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and iShares Core Total, you can compare the effects of market volatilities on Walmart and IShares Core 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 Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and IShares Core.
Diversification Opportunities for Walmart and IShares Core
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Walmart and IShares is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and iShares Core Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Total 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 Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Total has no effect on the direction of Walmart i.e., Walmart and IShares Core go up and down completely randomly.
Pair Corralation between Walmart and IShares Core
Considering the 90-day investment horizon Walmart is expected to generate 2.79 times more return on investment than IShares Core. However, Walmart is 2.79 times more volatile than iShares Core Total. It trades about 0.16 of its potential returns per unit of risk. iShares Core Total is currently generating about 0.05 per unit of risk. If you would invest 4,611 in Walmart on November 19, 2024 and sell it today you would earn a total of 5,793 from holding Walmart or generate 125.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. iShares Core Total
Performance |
| Timeline |
| Walmart |
| iShares Core Total |
Walmart and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and IShares Core
The main advantage of trading using opposite Walmart and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| IShares Core vs. iShares Core 1 5 | IShares Core vs. iShares Core International | IShares Core vs. iShares Treasury Bond | IShares Core vs. iShares 1 5 Year |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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