Correlation Between Walgreens Boots and AMAG Austria
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and AMAG Austria 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 AMAG Austria 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 AMAG Austria Metall, you can compare the effects of market volatilities on Walgreens Boots and AMAG Austria 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 AMAG Austria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and AMAG Austria.
Diversification Opportunities for Walgreens Boots and AMAG Austria
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Walgreens and AMAG is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and AMAG Austria Metall in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG Austria Metall 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 AMAG Austria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG Austria Metall has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and AMAG Austria go up and down completely randomly.
Pair Corralation between Walgreens Boots and AMAG Austria
Considering the 90-day investment horizon Walgreens Boots is expected to generate 1.52 times less return on investment than AMAG Austria. In addition to that, Walgreens Boots is 2.12 times more volatile than AMAG Austria Metall. It trades about 0.04 of its total potential returns per unit of risk. AMAG Austria Metall is currently generating about 0.12 per unit of volatility. If you would invest 2,270 in AMAG Austria Metall on September 25, 2024 and sell it today you would earn a total of 120.00 from holding AMAG Austria Metall or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. AMAG Austria Metall
Performance |
| Timeline |
| Walgreens Boots Alliance |
| AMAG Austria Metall |
Walgreens Boots and AMAG Austria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and AMAG Austria
The main advantage of trading using opposite Walgreens Boots and AMAG Austria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, AMAG Austria 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 AMAG Austria will offset losses from the drop in AMAG Austria's long position.| Walgreens Boots vs. Leafly Holdings | Walgreens Boots vs. WM Technology | Walgreens Boots vs. Revelation Biosciences | Walgreens Boots vs. AEye Inc |
| AMAG Austria vs. Norsk Hydro ASA | AMAG Austria vs. Norsk Hydro ASA | AMAG Austria vs. Alcoa Corp | AMAG Austria vs. Kaiser Aluminum |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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