Correlation Between Usaa MSCI and Walmart

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Can any of the company-specific risk be diversified away by investing in both Usaa MSCI and Walmart 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 Usaa MSCI and Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Usaa MSCI EM and Walmart, you can compare the effects of market volatilities on Usaa MSCI and Walmart 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 Usaa MSCI with a short position of Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usaa MSCI and Walmart.

Diversification Opportunities for Usaa MSCI and Walmart

  Correlation Coefficient

Modest diversification

The 3 months correlation between Usaa MSCI and Walmart is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Usaa MSCI EM and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart and Usaa MSCI 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 Usaa MSCI EM are associated (or correlated) with Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Usaa MSCI i.e., Usaa MSCI and Walmart go up and down completely randomly.

Pair Corralation between Usaa MSCI and Walmart

Given the investment horizon of 90 days Usaa MSCI is expected to generate 1.04 times less return on investment than Walmart. But when comparing it to its historical volatility, Usaa MSCI EM is 1.64 times less risky than Walmart. It trades about 0.33 of its potential returns per unit of risk. Walmart is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  14,233  in Walmart on August 30, 2022 and sell it today you would earn a total of  1,118  from holding Walmart or generate 7.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
ValuesDaily Returns

Usaa MSCI EM  vs.  Walmart

 Performance (%) 
Usaa MSCI Performance
0 of 100
Over the last 90 days Usaa MSCI EM has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Usaa MSCI is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Usaa MSCI Price Channel

Walmart Performance
12 of 100
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 weak primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

Walmart Price Channel

Usaa MSCI and Walmart Volatility Contrast

   Predicted Return Density   

Pair Trading with Usaa MSCI and Walmart

The main advantage of trading using opposite Usaa MSCI and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usaa MSCI position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.
Usaa MSCI vs. Emrg Mkts ESG
The idea behind Usaa MSCI EM and Walmart 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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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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