Correlation Between Walmart and DIGITAL
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By analyzing existing cross correlation between Walmart and DIGITAL RLTY TR, you can compare the effects of market volatilities on Walmart and DIGITAL 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 DIGITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and DIGITAL.
Diversification Opportunities for Walmart and DIGITAL
Pay attention - limited upside
The 3 months correlation between Walmart and DIGITAL is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and DIGITAL RLTY TR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIGITAL RLTY TR 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 DIGITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIGITAL RLTY TR has no effect on the direction of Walmart i.e., Walmart and DIGITAL go up and down completely randomly.
Pair Corralation between Walmart and DIGITAL
Considering the 90-day investment horizon Walmart is expected to generate 2.05 times more return on investment than DIGITAL. However, Walmart is 2.05 times more volatile than DIGITAL RLTY TR. It trades about 0.13 of its potential returns per unit of risk. DIGITAL RLTY TR is currently generating about 0.01 per unit of risk. If you would invest 4,838 in Walmart on August 29, 2024 and sell it today you would earn a total of 4,350 from holding Walmart or generate 89.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.57% |
| Values | Daily Returns |
Walmart vs. DIGITAL RLTY TR
Performance |
| Timeline |
| Walmart |
| DIGITAL RLTY TR |
Walmart and DIGITAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and DIGITAL
The main advantage of trading using opposite Walmart and DIGITAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, DIGITAL 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 DIGITAL will offset losses from the drop in DIGITAL's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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