Correlation Between Walmart and Spinnaker ETF
Can any of the company-specific risk be diversified away by investing in both Walmart and Spinnaker ETF 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 Spinnaker ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Spinnaker ETF Series, you can compare the effects of market volatilities on Walmart and Spinnaker ETF 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 Spinnaker ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Spinnaker ETF.
Diversification Opportunities for Walmart and Spinnaker ETF
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Walmart and Spinnaker is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Spinnaker ETF Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spinnaker ETF Series 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 Spinnaker ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spinnaker ETF Series has no effect on the direction of Walmart i.e., Walmart and Spinnaker ETF go up and down completely randomly.
Pair Corralation between Walmart and Spinnaker ETF
Considering the 90-day investment horizon Walmart is expected to generate 48.68 times less return on investment than Spinnaker ETF. But when comparing it to its historical volatility, Walmart is 75.1 times less risky than Spinnaker ETF. It trades about 0.12 of its potential returns per unit of risk. Spinnaker ETF Series is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Spinnaker ETF Series on August 26, 2024 and sell it today you would earn a total of 1,016 from holding Spinnaker ETF Series or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 32.39% |
| Values | Daily Returns |
Walmart vs. Spinnaker ETF Series
Performance |
| Timeline |
| Walmart |
| Spinnaker ETF Series |
Walmart and Spinnaker ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Spinnaker ETF
The main advantage of trading using opposite Walmart and Spinnaker ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Spinnaker ETF 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 Spinnaker ETF will offset losses from the drop in Spinnaker ETF'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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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