Correlation Between Walmart and DBX ETF

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

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

Diversification Opportunities for Walmart and DBX ETF

0.72

Correlation Coefficient

Walmart  DBX ETF

Poor diversification

The 3 months correlation between Walmart and DBX is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust 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 DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of Walmart i.e., Walmart and DBX ETF go up and down completely randomly.

Pair Corralation between Walmart and DBX ETF

Considering the 90-day investment horizon Walmart is expected to generate 1.44 times more return on investment than DBX ETF. However, Walmart is 1.44 times more volatile than DBX ETF Trust. It trades about -0.14 of its potential returns per unit of risk. DBX ETF Trust is currently generating about -0.22 per unit of risk. If you would invest  9,362  in Walmart on October 8, 2024 and sell it today you would lose (284.00) from holding Walmart or give up 3.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

Walmart  vs.  DBX ETF Trust

Walmart

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

DBX ETF Trust

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DBX ETF Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, DBX ETF is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Walmart and DBX ETF

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

The idea behind Walmart and DBX ETF Trust 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.