Correlation Between Walgreens Boots and Peak Resources
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Peak Resources 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 Peak Resources 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 Peak Resources Limited, you can compare the effects of market volatilities on Walgreens Boots and Peak Resources 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 Peak Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Peak Resources.
Diversification Opportunities for Walgreens Boots and Peak Resources
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walgreens and Peak is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Peak Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peak Resources 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 Peak Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peak Resources has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Peak Resources go up and down completely randomly.
Pair Corralation between Walgreens Boots and Peak Resources
Assuming the 90 days horizon Walgreens Boots Alliance is expected to under-perform the Peak Resources. But the stock apears to be less risky and, when comparing its historical volatility, Walgreens Boots Alliance is 2.56 times less risky than Peak Resources. The stock trades about -0.09 of its potential returns per unit of risk. The Peak Resources Limited is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 30.00 in Peak Resources Limited on September 4, 2024 and sell it today you would lose (23.65) from holding Peak Resources Limited or give up 78.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. Peak Resources Limited
Performance |
| Timeline |
| Walgreens Boots Alliance |
| Peak Resources |
Walgreens Boots and Peak Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and Peak Resources
The main advantage of trading using opposite Walgreens Boots and Peak Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Peak Resources 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 Peak Resources will offset losses from the drop in Peak Resources' long position.| Walgreens Boots vs. Alibaba Health Information | Walgreens Boots vs. Beijing Tong Ren | Walgreens Boots vs. PetMed Express | Walgreens Boots vs. Oriola Oyj |
| Peak Resources vs. BHP Group Limited | Peak Resources vs. Rio Tinto Group | Peak Resources vs. Vale SA | Peak Resources vs. Glencore plc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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