Correlation Between Walmart and IShares IBoxx
Can any of the company-specific risk be diversified away by investing in both Walmart and IShares IBoxx 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 IBoxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and iShares iBoxx Investment, you can compare the effects of market volatilities on Walmart and IShares IBoxx 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 IBoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and IShares IBoxx.
Diversification Opportunities for Walmart and IShares IBoxx
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and IShares is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and iShares iBoxx Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iBoxx Investment 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 IBoxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares iBoxx Investment has no effect on the direction of Walmart i.e., Walmart and IShares IBoxx go up and down completely randomly.
Pair Corralation between Walmart and IShares IBoxx
Considering the 90-day investment horizon Walmart is expected to generate 1.93 times more return on investment than IShares IBoxx. However, Walmart is 1.93 times more volatile than iShares iBoxx Investment. It trades about 0.13 of its potential returns per unit of risk. iShares iBoxx Investment is currently generating about 0.04 per unit of risk. If you would invest 4,725 in Walmart on August 30, 2024 and sell it today you would earn a total of 4,463 from holding Walmart or generate 94.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. iShares iBoxx Investment
Performance |
| Timeline |
| Walmart |
| iShares iBoxx Investment |
Walmart and IShares IBoxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and IShares IBoxx
The main advantage of trading using opposite Walmart and IShares IBoxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, IShares IBoxx 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 IBoxx will offset losses from the drop in IShares IBoxx's long position.| Walmart vs. Weis Markets | Walmart vs. Ingles Markets Incorporated | Walmart vs. Sendas Distribuidora SA | Walmart vs. Village Super Market |
| IShares IBoxx vs. iShares iBoxx High | IShares IBoxx vs. iShares 1 3 Year | IShares IBoxx vs. iShares TIPS Bond | IShares IBoxx vs. iShares 7 10 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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