Correlation Between Walgreens Boots and SEALED AIR
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and SEALED AIR 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 SEALED AIR 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 SEALED AIR , you can compare the effects of market volatilities on Walgreens Boots and SEALED AIR 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 SEALED AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and SEALED AIR.
Diversification Opportunities for Walgreens Boots and SEALED AIR
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walgreens and SEALED is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR 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 SEALED AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALED AIR has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and SEALED AIR go up and down completely randomly.
Pair Corralation between Walgreens Boots and SEALED AIR
Assuming the 90 days horizon Walgreens Boots is expected to generate 2.54 times less return on investment than SEALED AIR. In addition to that, Walgreens Boots is 1.84 times more volatile than SEALED AIR . It trades about 0.02 of its total potential returns per unit of risk. SEALED AIR is currently generating about 0.12 per unit of volatility. If you would invest 3,320 in SEALED AIR on September 5, 2024 and sell it today you would earn a total of 140.00 from holding SEALED AIR or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. SEALED AIR
Performance |
| Timeline |
| Walgreens Boots Alliance |
| SEALED AIR |
Walgreens Boots and SEALED AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and SEALED AIR
The main advantage of trading using opposite Walgreens Boots and SEALED AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, SEALED AIR 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 SEALED AIR will offset losses from the drop in SEALED AIR's long position.| Walgreens Boots vs. APPLIED MATERIALS | Walgreens Boots vs. Sumitomo Rubber Industries | Walgreens Boots vs. Compagnie Plastic Omnium | Walgreens Boots vs. CEOTRONICS |
| SEALED AIR vs. TOTAL GABON | SEALED AIR vs. Walgreens Boots Alliance | SEALED AIR 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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