Correlation Between Walmart and Innovator Premium
Can any of the company-specific risk be diversified away by investing in both Walmart and Innovator Premium 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 Premium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Innovator Premium Income, you can compare the effects of market volatilities on Walmart and Innovator Premium 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 Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Innovator Premium.
Diversification Opportunities for Walmart and Innovator Premium
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walmart and Innovator is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Innovator Premium Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Premium Income 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 Premium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Premium Income has no effect on the direction of Walmart i.e., Walmart and Innovator Premium go up and down completely randomly.
Pair Corralation between Walmart and Innovator Premium
Considering the 90-day investment horizon Walmart is expected to generate 10.43 times more return on investment than Innovator Premium. However, Walmart is 10.43 times more volatile than Innovator Premium Income. It trades about 0.25 of its potential returns per unit of risk. Innovator Premium Income is currently generating about 0.17 per unit of risk. If you would invest 6,563 in Walmart on September 1, 2024 and sell it today you would earn a total of 2,687 from holding Walmart or generate 40.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Walmart vs. Innovator Premium Income
Performance |
| Timeline |
| Walmart |
| Innovator Premium Income |
Walmart and Innovator Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Innovator Premium
The main advantage of trading using opposite Walmart and Innovator Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Innovator Premium 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 Premium will offset losses from the drop in Innovator Premium's long position.| Walmart vs. Ingles Markets Incorporated | Walmart vs. Grocery Outlet Holding | Walmart vs. Ocado Group plc | Walmart vs. Sprouts Farmers Market |
| Innovator Premium vs. Innovator ETFs Trust | Innovator Premium vs. First Trust Cboe | Innovator Premium vs. Innovator SP 500 | Innovator Premium vs. Innovator Equity 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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