Correlation Between Walgreens Boots and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC, you can compare the effects of market volatilities on Walgreens Boots and STORE ELECTRONIC 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 STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and STORE ELECTRONIC.
Diversification Opportunities for Walgreens Boots and STORE ELECTRONIC
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walgreens and STORE is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC 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 STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between Walgreens Boots and STORE ELECTRONIC
Assuming the 90 days horizon Walgreens Boots Alliance is expected to generate 2.13 times more return on investment than STORE ELECTRONIC. However, Walgreens Boots is 2.13 times more volatile than STORE ELECTRONIC. It trades about 0.07 of its potential returns per unit of risk. STORE ELECTRONIC is currently generating about 0.0 per unit of risk. If you would invest 834.00 in Walgreens Boots Alliance on September 4, 2024 and sell it today you would earn a total of 30.00 from holding Walgreens Boots Alliance or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. STORE ELECTRONIC
Performance |
| Timeline |
| Walgreens Boots Alliance |
| STORE ELECTRONIC |
Walgreens Boots and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and STORE ELECTRONIC
The main advantage of trading using opposite Walgreens Boots and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| Walgreens Boots vs. Alibaba Health Information | Walgreens Boots vs. Beijing Tong Ren | Walgreens Boots vs. PetMed Express | Walgreens Boots vs. Oriola Oyj |
| STORE ELECTRONIC vs. TOTAL GABON | STORE ELECTRONIC vs. Walgreens Boots Alliance | STORE ELECTRONIC 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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