Correlation Between Aozora Bank and Walgreens Boots
Can any of the company-specific risk be diversified away by investing in both Aozora Bank and Walgreens Boots 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 Aozora Bank and Walgreens Boots into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aozora Bank and Walgreens Boots Alliance, you can compare the effects of market volatilities on Aozora Bank and Walgreens Boots 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 Aozora Bank with a short position of Walgreens Boots. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aozora Bank and Walgreens Boots.
Diversification Opportunities for Aozora Bank and Walgreens Boots
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aozora and Walgreens is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Aozora Bank and Walgreens Boots Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walgreens Boots Alliance and Aozora Bank 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 Aozora Bank are associated (or correlated) with Walgreens Boots. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walgreens Boots Alliance has no effect on the direction of Aozora Bank i.e., Aozora Bank and Walgreens Boots go up and down completely randomly.
Pair Corralation between Aozora Bank and Walgreens Boots
Assuming the 90 days horizon Aozora Bank is expected to generate 0.93 times more return on investment than Walgreens Boots. However, Aozora Bank is 1.07 times less risky than Walgreens Boots. It trades about -0.02 of its potential returns per unit of risk. Walgreens Boots Alliance is currently generating about -0.11 per unit of risk. If you would invest 1,960 in Aozora Bank on September 12, 2024 and sell it today you would lose (460.00) from holding Aozora Bank or give up 23.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aozora Bank vs. Walgreens Boots Alliance
Performance |
| Timeline |
| Aozora Bank |
| Walgreens Boots Alliance |
Aozora Bank and Walgreens Boots Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aozora Bank and Walgreens Boots
The main advantage of trading using opposite Aozora Bank and Walgreens Boots positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aozora Bank position performs unexpectedly, Walgreens Boots 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 Walgreens Boots will offset losses from the drop in Walgreens Boots' long position.| Aozora Bank vs. Agricultural Bank of | Aozora Bank vs. Commonwealth Bank of | Aozora Bank vs. Superior Plus Corp | Aozora Bank vs. SIVERS SEMICONDUCTORS AB |
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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 the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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