Correlation Between Walgreens Boots and AEON STORES
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and AEON STORES 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 AEON STORES 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 AEON STORES, you can compare the effects of market volatilities on Walgreens Boots and AEON STORES 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 AEON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and AEON STORES.
Diversification Opportunities for Walgreens Boots and AEON STORES
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walgreens and AEON is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and AEON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON STORES 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 AEON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON STORES has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and AEON STORES go up and down completely randomly.
Pair Corralation between Walgreens Boots and AEON STORES
Assuming the 90 days horizon Walgreens Boots Alliance is expected to under-perform the AEON STORES. But the stock apears to be less risky and, when comparing its historical volatility, Walgreens Boots Alliance is 1.14 times less risky than AEON STORES. The stock trades about -0.09 of its potential returns per unit of risk. The AEON STORES is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 8.37 in AEON STORES on September 3, 2024 and sell it today you would lose (2.32) from holding AEON STORES or give up 27.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. AEON STORES
Performance |
| Timeline |
| Walgreens Boots Alliance |
| AEON STORES |
Walgreens Boots and AEON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and AEON STORES
The main advantage of trading using opposite Walgreens Boots and AEON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, AEON STORES 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 AEON STORES will offset losses from the drop in AEON STORES'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 |
| AEON STORES vs. TOTAL GABON | AEON STORES vs. Walgreens Boots Alliance | AEON STORES 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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