Correlation Between Walmart and SPDR DoubleLine
Can any of the company-specific risk be diversified away by investing in both Walmart and SPDR DoubleLine 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 SPDR DoubleLine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and SPDR DoubleLine Total, you can compare the effects of market volatilities on Walmart and SPDR DoubleLine 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 SPDR DoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and SPDR DoubleLine.
Diversification Opportunities for Walmart and SPDR DoubleLine
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and SPDR is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and SPDR DoubleLine Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR DoubleLine Total 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 SPDR DoubleLine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR DoubleLine Total has no effect on the direction of Walmart i.e., Walmart and SPDR DoubleLine go up and down completely randomly.
Pair Corralation between Walmart and SPDR DoubleLine
Considering the 90-day investment horizon Walmart is expected to generate 3.09 times more return on investment than SPDR DoubleLine. However, Walmart is 3.09 times more volatile than SPDR DoubleLine Total. It trades about 0.49 of its potential returns per unit of risk. SPDR DoubleLine Total 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. SPDR DoubleLine Total
Performance |
| Timeline |
| Walmart |
| SPDR DoubleLine Total |
Walmart and SPDR DoubleLine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and SPDR DoubleLine
The main advantage of trading using opposite Walmart and SPDR DoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, SPDR DoubleLine 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 SPDR DoubleLine will offset losses from the drop in SPDR DoubleLine's long position.| Walmart vs. Weis Markets | Walmart vs. Ingles Markets Incorporated | Walmart vs. Sendas Distribuidora SA | Walmart vs. Grocery Outlet Holding |
| SPDR DoubleLine vs. PIMCO Active Bond | SPDR DoubleLine vs. SPDR Blackstone Senior | SPDR DoubleLine vs. SPDR Barclays Intermediate | SPDR DoubleLine vs. SPDR Bloomberg Investment |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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