Correlation Between Walgreens Boots and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on Walgreens Boots and ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and ORMAT TECHNOLOGIES.
Diversification Opportunities for Walgreens Boots and ORMAT TECHNOLOGIES
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walgreens and ORMAT is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORMAT TECHNOLOGIES has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Walgreens Boots and ORMAT TECHNOLOGIES
Assuming the 90 days horizon Walgreens Boots is expected to generate 1.27 times less return on investment than ORMAT TECHNOLOGIES. In addition to that, Walgreens Boots is 2.43 times more volatile than ORMAT TECHNOLOGIES. It trades about 0.06 of its total potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about 0.18 per unit of volatility. If you would invest 6,639 in ORMAT TECHNOLOGIES on September 3, 2024 and sell it today you would earn a total of 1,081 from holding ORMAT TECHNOLOGIES or generate 16.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| Walgreens Boots Alliance |
| ORMAT TECHNOLOGIES |
Walgreens Boots and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and ORMAT TECHNOLOGIES
The main advantage of trading using opposite Walgreens Boots and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES will offset losses from the drop in ORMAT TECHNOLOGIES'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 |
| ORMAT TECHNOLOGIES vs. TOTAL GABON | ORMAT TECHNOLOGIES vs. Walgreens Boots Alliance | ORMAT TECHNOLOGIES vs. Banco Santander SA | ORMAT TECHNOLOGIES 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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