Correlation Between Walgreens Boots and LEGACY IRON
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and LEGACY IRON 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 LEGACY IRON 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 LEGACY IRON ORE, you can compare the effects of market volatilities on Walgreens Boots and LEGACY IRON 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 LEGACY IRON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and LEGACY IRON.
Diversification Opportunities for Walgreens Boots and LEGACY IRON
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walgreens and LEGACY is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and LEGACY IRON ORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEGACY IRON ORE 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 LEGACY IRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEGACY IRON ORE has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and LEGACY IRON go up and down completely randomly.
Pair Corralation between Walgreens Boots and LEGACY IRON
Assuming the 90 days horizon Walgreens Boots Alliance is expected to under-perform the LEGACY IRON. In addition to that, Walgreens Boots is 5.49 times more volatile than LEGACY IRON ORE. It trades about -0.09 of its total potential returns per unit of risk. LEGACY IRON ORE is currently generating about -0.06 per unit of volatility. If you would invest 1.22 in LEGACY IRON ORE on September 3, 2024 and sell it today you would lose (0.17) from holding LEGACY IRON ORE or give up 13.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. LEGACY IRON ORE
Performance |
| Timeline |
| Walgreens Boots Alliance |
| LEGACY IRON ORE |
Walgreens Boots and LEGACY IRON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and LEGACY IRON
The main advantage of trading using opposite Walgreens Boots and LEGACY IRON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, LEGACY IRON 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 LEGACY IRON will offset losses from the drop in LEGACY IRON's long position.| Walgreens Boots vs. Walgreens Boots Alliance | Walgreens Boots vs. Walgreens Boots Alliance | Walgreens Boots vs. Walgreens Boots Alliance | Walgreens Boots vs. Walgreens Boots Alliance |
| LEGACY IRON vs. TOTAL GABON | LEGACY IRON vs. Walgreens Boots Alliance | LEGACY IRON vs. Peak Resources Limited |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |