Correlation Between Walmart and Xtrackers MSCI
Can any of the company-specific risk be diversified away by investing in both Walmart and Xtrackers MSCI 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 Xtrackers MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Xtrackers MSCI USA, you can compare the effects of market volatilities on Walmart and Xtrackers MSCI 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 Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Xtrackers MSCI.
Diversification Opportunities for Walmart and Xtrackers MSCI
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Walmart and Xtrackers is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Xtrackers MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI USA 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 Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI USA has no effect on the direction of Walmart i.e., Walmart and Xtrackers MSCI go up and down completely randomly.
Pair Corralation between Walmart and Xtrackers MSCI
Considering the 90-day investment horizon Walmart is expected to generate 1.29 times more return on investment than Xtrackers MSCI. However, Walmart is 1.29 times more volatile than Xtrackers MSCI USA. It trades about 0.15 of its potential returns per unit of risk. Xtrackers MSCI USA is currently generating about 0.11 per unit of risk. If you would invest 4,450 in Walmart on November 28, 2024 and sell it today you would earn a total of 5,319 from holding Walmart or generate 119.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Xtrackers MSCI USA
Performance |
| Timeline |
| Walmart |
| Xtrackers MSCI USA |
Walmart and Xtrackers MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Xtrackers MSCI
The main advantage of trading using opposite Walmart and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Xtrackers MSCI 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 Xtrackers MSCI will offset losses from the drop in Xtrackers MSCI's long position.| Walmart vs. Aquagold International | Walmart vs. Thrivent High Yield | Walmart vs. Morningstar Unconstrained Allocation | Walmart vs. Via Renewables |
| Xtrackers MSCI vs. iShares ESG MSCI | Xtrackers MSCI vs. Xtrackers SP 500 | Xtrackers MSCI vs. iShares MSCI USA | Xtrackers MSCI vs. Vanguard ESG International |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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