Correlation Between Walmart and ETF Series
Can any of the company-specific risk be diversified away by investing in both Walmart and ETF Series 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 ETF Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and ETF Series Solutions, you can compare the effects of market volatilities on Walmart and ETF Series 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and ETF Series.
Diversification Opportunities for Walmart and ETF Series
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walmart and ETF is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of Walmart i.e., Walmart and ETF Series go up and down completely randomly.
Pair Corralation between Walmart and ETF Series
Considering the 90-day investment horizon Walmart is expected to generate 6.75 times more return on investment than ETF Series. However, Walmart is 6.75 times more volatile than ETF Series Solutions. It trades about 0.49 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.09 per unit of risk. If you would invest 8,170 in Walmart on August 30, 2024 and sell it today you would earn a total of 1,018 from holding Walmart or generate 12.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. ETF Series Solutions
Performance |
| Timeline |
| Walmart |
| ETF Series Solutions |
Walmart and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and ETF Series
The main advantage of trading using opposite Walmart and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' long position.| Walmart vs. Weis Markets | Walmart vs. Ingles Markets Incorporated | Walmart vs. Sendas Distribuidora SA | Walmart vs. Grocery Outlet Holding |
| ETF Series vs. Valued Advisers Trust | ETF Series vs. Columbia Diversified Fixed | ETF Series vs. Principal Exchange Traded Funds | ETF Series vs. Doubleline Etf Trust |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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