Correlation Between Walmart and IShares Residential
Can any of the company-specific risk be diversified away by investing in both Walmart and IShares Residential 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 Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and iShares Residential and, you can compare the effects of market volatilities on Walmart and IShares Residential 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 Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and IShares Residential.
Diversification Opportunities for Walmart and IShares Residential
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walmart and IShares is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and iShares Residential and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Residential and 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 Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Residential and has no effect on the direction of Walmart i.e., Walmart and IShares Residential go up and down completely randomly.
Pair Corralation between Walmart and IShares Residential
Considering the 90-day investment horizon Walmart is expected to generate 0.72 times more return on investment than IShares Residential. However, Walmart is 1.38 times less risky than IShares Residential. It trades about 0.46 of its potential returns per unit of risk. iShares Residential and is currently generating about 0.09 per unit of risk. If you would invest 9,000 in Walmart on November 3, 2024 and sell it today you would earn a total of 816.00 from holding Walmart or generate 9.07% 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 Residential and
Performance |
| Timeline |
| Walmart |
| iShares Residential and |
Walmart and IShares Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and IShares Residential
The main advantage of trading using opposite Walmart and IShares Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, IShares Residential 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 Residential will offset losses from the drop in IShares Residential's long position.| Walmart vs. ProShares Russell Dividend | Walmart vs. United Rentals | Walmart vs. Kforce Inc | Walmart vs. The Ensign Group |
| IShares Residential vs. First Trust SP | IShares Residential vs. Invesco Active Real | IShares Residential vs. SPDR Dow Jones | IShares Residential vs. iShares Mortgage Real |
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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