Correlation Between Walmart and DIAGEO
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By analyzing existing cross correlation between Walmart and DIAGEO CAP PLC, you can compare the effects of market volatilities on Walmart and DIAGEO 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 DIAGEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and DIAGEO.
Diversification Opportunities for Walmart and DIAGEO
Very good diversification
The 3 months correlation between Walmart and DIAGEO is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and DIAGEO CAP PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIAGEO CAP PLC 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 DIAGEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIAGEO CAP PLC has no effect on the direction of Walmart i.e., Walmart and DIAGEO go up and down completely randomly.
Pair Corralation between Walmart and DIAGEO
Considering the 90-day investment horizon Walmart is expected to generate 0.61 times more return on investment than DIAGEO. However, Walmart is 1.63 times less risky than DIAGEO. It trades about 0.49 of its potential returns per unit of risk. DIAGEO CAP PLC is currently generating about 0.18 per unit of risk. If you would invest 8,421 in Walmart on September 12, 2024 and sell it today you would earn a total of 1,034 from holding Walmart or generate 12.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Walmart vs. DIAGEO CAP PLC
Performance |
| Timeline |
| Walmart |
| DIAGEO CAP PLC |
Walmart and DIAGEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and DIAGEO
The main advantage of trading using opposite Walmart and DIAGEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, DIAGEO 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 DIAGEO will offset losses from the drop in DIAGEO'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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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