Correlation Between Walmart and Vanguard Health
Can any of the company-specific risk be diversified away by investing in both Walmart and Vanguard Health 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 Vanguard Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Vanguard Health Care, you can compare the effects of market volatilities on Walmart and Vanguard Health 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 Vanguard Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Vanguard Health.
Diversification Opportunities for Walmart and Vanguard Health
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walmart and Vanguard is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Vanguard Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Health Care 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 Vanguard Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Health Care has no effect on the direction of Walmart i.e., Walmart and Vanguard Health go up and down completely randomly.
Pair Corralation between Walmart and Vanguard Health
Considering the 90-day investment horizon Walmart is expected to generate 1.54 times more return on investment than Vanguard Health. However, Walmart is 1.54 times more volatile than Vanguard Health Care. It trades about 0.22 of its potential returns per unit of risk. Vanguard Health Care is currently generating about 0.07 per unit of risk. If you would invest 5,121 in Walmart on August 26, 2024 and sell it today you would earn a total of 3,923 from holding Walmart or generate 76.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walmart vs. Vanguard Health Care
Performance |
| Timeline |
| Walmart |
| Vanguard Health Care |
Walmart and Vanguard Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Vanguard Health
The main advantage of trading using opposite Walmart and Vanguard Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Vanguard Health 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 Vanguard Health will offset losses from the drop in Vanguard Health's long position.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Vanguard Health vs. Vanguard Consumer Staples | Vanguard Health vs. Vanguard Financials Index | Vanguard Health vs. Vanguard Information Technology | Vanguard Health vs. Vanguard Consumer Discretionary |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |