Correlation Between Walgreens Boots and RETAIL FOOD
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and RETAIL FOOD 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 Walgreens Boots and RETAIL FOOD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walgreens Boots Alliance and RETAIL FOOD GROUP, you can compare the effects of market volatilities on Walgreens Boots and RETAIL FOOD 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 Walgreens Boots with a short position of RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and RETAIL FOOD.
Diversification Opportunities for Walgreens Boots and RETAIL FOOD
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walgreens and RETAIL is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD GROUP and Walgreens Boots 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 Walgreens Boots Alliance are associated (or correlated) with RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and RETAIL FOOD go up and down completely randomly.
Pair Corralation between Walgreens Boots and RETAIL FOOD
Assuming the 90 days trading horizon Walgreens Boots Alliance is expected to generate 1.87 times more return on investment than RETAIL FOOD. However, Walgreens Boots is 1.87 times more volatile than RETAIL FOOD GROUP. It trades about 0.1 of its potential returns per unit of risk. RETAIL FOOD GROUP is currently generating about -0.11 per unit of risk. If you would invest 838.00 in Walgreens Boots Alliance on November 2, 2024 and sell it today you would earn a total of 253.00 from holding Walgreens Boots Alliance or generate 30.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. RETAIL FOOD GROUP
Performance |
| Timeline |
| Walgreens Boots Alliance |
| RETAIL FOOD GROUP |
Walgreens Boots and RETAIL FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and RETAIL FOOD
The main advantage of trading using opposite Walgreens Boots and RETAIL FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, RETAIL FOOD 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 RETAIL FOOD will offset losses from the drop in RETAIL FOOD's long position.| Walgreens Boots vs. ELL ENVIRONHLDGS HD 0001 | Walgreens Boots vs. The Japan Steel | Walgreens Boots vs. MOLSON RS BEVERAGE | Walgreens Boots vs. Monster Beverage Corp |
| RETAIL FOOD vs. Siamgas And Petrochemicals | RETAIL FOOD vs. Coeur Mining | RETAIL FOOD vs. Sekisui Chemical Co | RETAIL FOOD vs. DISTRICT METALS |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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