Correlation Between Walmart and Invesco India

Can any of the company-specific risk be diversified away by investing in both Walmart and Invesco India 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 Invesco India into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Walmart and Invesco India ETF, you can compare the effects of market volatilities on Walmart and Invesco India 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 Invesco India. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Invesco India.

Diversification Opportunities for Walmart and Invesco India

-0.33

Correlation Coefficient

Walmart  Invesco India

Very good diversification

The 3 months correlation between Walmart and Invesco is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and Invesco India ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco India ETF 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 Invesco India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco India ETF has no effect on the direction of Walmart i.e., Walmart and Invesco India go up and down completely randomly.

Pair Corralation between Walmart and Invesco India

Considering the 90-day investment horizon Walmart is expected to generate 1.24 times more return on investment than Invesco India. However, Walmart is 1.24 times more volatile than Invesco India ETF. It trades about 0.14 of its potential returns per unit of risk. Invesco India ETF is currently generating about 0.07 per unit of risk. If you would invest  4,694  in Walmart on October 23, 2024 and sell it today you would earn a total of  4,686  from holding Walmart or generate 99.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Walmart  vs.  Invesco India ETF

Walmart

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Walmart may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Invesco India ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco India ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Etf's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Walmart and Invesco India

The main advantage of trading using opposite Walmart and Invesco India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart position performs unexpectedly, Invesco India 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 Invesco India will offset losses from the drop in Invesco India's long position.

The idea behind Walmart and Invesco India ETF pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..