Correlation Between Walgreens Boots and SCOTT TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY, you can compare the effects of market volatilities on Walgreens Boots and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and SCOTT TECHNOLOGY.
Diversification Opportunities for Walgreens Boots and SCOTT TECHNOLOGY
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walgreens and SCOTT is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and SCOTT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTT TECHNOLOGY has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and SCOTT TECHNOLOGY go up and down completely randomly.
Pair Corralation between Walgreens Boots and SCOTT TECHNOLOGY
Assuming the 90 days horizon Walgreens Boots Alliance is expected to under-perform the SCOTT TECHNOLOGY. In addition to that, Walgreens Boots is 1.12 times more volatile than SCOTT TECHNOLOGY. It trades about -0.09 of its total potential returns per unit of risk. SCOTT TECHNOLOGY is currently generating about 0.02 per unit of volatility. If you would invest 132.00 in SCOTT TECHNOLOGY on September 3, 2024 and sell it today you would earn a total of 4.00 from holding SCOTT TECHNOLOGY or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. SCOTT TECHNOLOGY
Performance |
| Timeline |
| Walgreens Boots Alliance |
| SCOTT TECHNOLOGY |
Walgreens Boots and SCOTT TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and SCOTT TECHNOLOGY
The main advantage of trading using opposite Walgreens Boots and SCOTT TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY will offset losses from the drop in SCOTT TECHNOLOGY'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 |
| SCOTT TECHNOLOGY vs. TOTAL GABON | SCOTT TECHNOLOGY vs. Walgreens Boots Alliance | SCOTT TECHNOLOGY 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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