Correlation Between Walgreens Boots and ZhongAn Online
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and ZhongAn Online 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 ZhongAn Online 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 ZhongAn Online P, you can compare the effects of market volatilities on Walgreens Boots and ZhongAn Online 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 ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and ZhongAn Online.
Diversification Opportunities for Walgreens Boots and ZhongAn Online
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Walgreens and ZhongAn is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P 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 ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and ZhongAn Online go up and down completely randomly.
Pair Corralation between Walgreens Boots and ZhongAn Online
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to under-perform the ZhongAn Online. But the stock apears to be less risky and, when comparing its historical volatility, Walgreens Boots Alliance is 1.26 times less risky than ZhongAn Online. The stock trades about -0.07 of its potential returns per unit of risk. The ZhongAn Online P is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 242.00 in ZhongAn Online P on September 14, 2024 and sell it today you would lose (89.00) from holding ZhongAn Online P or give up 36.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.21% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. ZhongAn Online P
Performance |
| Timeline |
| Walgreens Boots Alliance |
| ZhongAn Online P |
Walgreens Boots and ZhongAn Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and ZhongAn Online
The main advantage of trading using opposite Walgreens Boots and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.| Walgreens Boots vs. PetMed Express | Walgreens Boots vs. 111 Inc | Walgreens Boots vs. China Jo Jo Drugstores | Walgreens Boots vs. High Tide |
| ZhongAn Online vs. TFS FINANCIAL | ZhongAn Online vs. WIMFARM SA EO | ZhongAn Online vs. Hitachi Construction Machinery | ZhongAn Online vs. TITAN MACHINERY |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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