Correlation Between ASTRA INTERNATIONAL and Walgreens Boots
Can any of the company-specific risk be diversified away by investing in both ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL and Walgreens Boots into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASTRA INTERNATIONAL and Walgreens Boots Alliance, you can compare the effects of market volatilities on ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL with a short position of Walgreens Boots. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASTRA INTERNATIONAL and Walgreens Boots.
Diversification Opportunities for ASTRA INTERNATIONAL and Walgreens Boots
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASTRA and Walgreens is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL i.e., ASTRA INTERNATIONAL and Walgreens Boots go up and down completely randomly.
Pair Corralation between ASTRA INTERNATIONAL and Walgreens Boots
Assuming the 90 days trading horizon ASTRA INTERNATIONAL is expected to generate 1.7 times more return on investment than Walgreens Boots. However, ASTRA INTERNATIONAL is 1.7 times more volatile than Walgreens Boots Alliance. It trades about 0.01 of its potential returns per unit of risk. Walgreens Boots Alliance is currently generating about -0.09 per unit of risk. If you would invest 38.00 in ASTRA INTERNATIONAL on September 4, 2024 and sell it today you would lose (7.00) from holding ASTRA INTERNATIONAL or give up 18.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASTRA INTERNATIONAL vs. Walgreens Boots Alliance
Performance |
| Timeline |
| ASTRA INTERNATIONAL |
| Walgreens Boots Alliance |
ASTRA INTERNATIONAL and Walgreens Boots Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASTRA INTERNATIONAL and Walgreens Boots
The main advantage of trading using opposite ASTRA INTERNATIONAL and Walgreens Boots positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASTRA INTERNATIONAL 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.| ASTRA INTERNATIONAL vs. TOTAL GABON | ASTRA INTERNATIONAL vs. Walgreens Boots Alliance | ASTRA INTERNATIONAL vs. Peak Resources Limited |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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