Correlation Between Walmart and IShares Interest
Can any of the company-specific risk be diversified away by investing in both Walmart and IShares Interest 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 Interest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and iShares Interest Rate, you can compare the effects of market volatilities on Walmart and IShares Interest 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 Interest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and IShares Interest.
Diversification Opportunities for Walmart and IShares Interest
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walmart and IShares is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and iShares Interest Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Interest Rate 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 Interest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Interest Rate has no effect on the direction of Walmart i.e., Walmart and IShares Interest go up and down completely randomly.
Pair Corralation between Walmart and IShares Interest
Considering the 90-day investment horizon Walmart is expected to generate 5.6 times more return on investment than IShares Interest. However, Walmart is 5.6 times more volatile than iShares Interest Rate. It trades about 0.28 of its potential returns per unit of risk. iShares Interest Rate is currently generating about 0.19 per unit of risk. If you would invest 8,327 in Walmart on August 24, 2024 and sell it today you would earn a total of 512.00 from holding Walmart or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. iShares Interest Rate
Performance |
| Timeline |
| Walmart |
| iShares Interest Rate |
Walmart and IShares Interest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and IShares Interest
The main advantage of trading using opposite Walmart and IShares Interest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, IShares Interest 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 Interest will offset losses from the drop in IShares Interest's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| IShares Interest vs. iShares Interest Rate | IShares Interest vs. iShares Interest Rate | IShares Interest vs. iShares Inflation Hedged | IShares Interest vs. ProShares Investment GradeInterest |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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