Correlation Between Walmart and Prologis
Can any of the company-specific risk be diversified away by investing in both Walmart and Prologis 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 Prologis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Prologis, you can compare the effects of market volatilities on Walmart and Prologis 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 Prologis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Prologis.
Diversification Opportunities for Walmart and Prologis
Very good diversification
The 3 months correlation between Walmart and Prologis is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prologis 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 Prologis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prologis has no effect on the direction of Walmart i.e., Walmart and Prologis go up and down completely randomly.
Pair Corralation between Walmart and Prologis
Considering the 90-day investment horizon Walmart is expected to generate 0.81 times more return on investment than Prologis. However, Walmart is 1.24 times less risky than Prologis. It trades about 0.42 of its potential returns per unit of risk. Prologis is currently generating about 0.01 per unit of risk. If you would invest 8,275 in Walmart on August 29, 2024 and sell it today you would earn a total of 913.00 from holding Walmart or generate 11.03% 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. Prologis
Performance |
| Timeline |
| Walmart |
| Prologis |
Walmart and Prologis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Prologis
The main advantage of trading using opposite Walmart and Prologis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Prologis 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 Prologis will offset losses from the drop in Prologis' long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Prologis vs. Rexford Industrial Realty | Prologis vs. LXP Industrial Trust | Prologis vs. Public Storage | Prologis vs. Rexford Industrial Realty |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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