Correlation Between Walgreens Boots and Corporate Travel
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Corporate Travel 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 Corporate Travel 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 Corporate Travel Management, you can compare the effects of market volatilities on Walgreens Boots and Corporate Travel 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 Corporate Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Corporate Travel.
Diversification Opportunities for Walgreens Boots and Corporate Travel
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Walgreens and Corporate is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Corporate Travel Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Travel Man 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 Corporate Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Travel Man has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Corporate Travel go up and down completely randomly.
Pair Corralation between Walgreens Boots and Corporate Travel
Assuming the 90 days trading horizon Walgreens Boots Alliance is expected to generate 2.16 times more return on investment than Corporate Travel. However, Walgreens Boots is 2.16 times more volatile than Corporate Travel Management. It trades about 0.17 of its potential returns per unit of risk. Corporate Travel Management is currently generating about 0.11 per unit of risk. If you would invest 840.00 in Walgreens Boots Alliance on September 14, 2024 and sell it today you would earn a total of 106.00 from holding Walgreens Boots Alliance or generate 12.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. Corporate Travel Management
Performance |
| Timeline |
| Walgreens Boots Alliance |
| Corporate Travel Man |
Walgreens Boots and Corporate Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and Corporate Travel
The main advantage of trading using opposite Walgreens Boots and Corporate Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Corporate Travel 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 Corporate Travel will offset losses from the drop in Corporate Travel's long position.| Walgreens Boots vs. PKSHA TECHNOLOGY INC | Walgreens Boots vs. AAC TECHNOLOGHLDGADR | Walgreens Boots vs. ZINC MEDIA GR | Walgreens Boots vs. XLMedia PLC |
| Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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