Correlation Between Walgreens Boots and KPX Green
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and KPX Green 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 KPX Green 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 KPX Green Chemical, you can compare the effects of market volatilities on Walgreens Boots and KPX Green 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 KPX Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and KPX Green.
Diversification Opportunities for Walgreens Boots and KPX Green
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walgreens and KPX is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and KPX Green Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KPX Green Chemical 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 KPX Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KPX Green Chemical has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and KPX Green go up and down completely randomly.
Pair Corralation between Walgreens Boots and KPX Green
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to under-perform the KPX Green. But the stock apears to be less risky and, when comparing its historical volatility, Walgreens Boots Alliance is 1.11 times less risky than KPX Green. The stock trades about -0.07 of its potential returns per unit of risk. The KPX Green Chemical is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 907,373 in KPX Green Chemical on September 26, 2024 and sell it today you would lose (256,373) from holding KPX Green Chemical or give up 28.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.38% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. KPX Green Chemical
Performance |
| Timeline |
| Walgreens Boots Alliance |
| KPX Green Chemical |
Walgreens Boots and KPX Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and KPX Green
The main advantage of trading using opposite Walgreens Boots and KPX Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, KPX Green 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 KPX Green will offset losses from the drop in KPX Green's long position.| Walgreens Boots vs. Leafly Holdings | Walgreens Boots vs. WM Technology | Walgreens Boots vs. Revelation Biosciences | Walgreens Boots vs. AEye Inc |
| KPX Green vs. Koryo Credit Information | KPX Green vs. Moadata Co | KPX Green vs. PlayD Co | KPX Green vs. LG Display Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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