Correlation Between Walgreens Boots and Sendas Distribuidora
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Sendas Distribuidora 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 Sendas Distribuidora 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 Sendas Distribuidora SA, you can compare the effects of market volatilities on Walgreens Boots and Sendas Distribuidora 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 Sendas Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Sendas Distribuidora.
Diversification Opportunities for Walgreens Boots and Sendas Distribuidora
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walgreens and Sendas is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Sendas Distribuidora SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sendas Distribuidora 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 Sendas Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sendas Distribuidora has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Sendas Distribuidora go up and down completely randomly.
Pair Corralation between Walgreens Boots and Sendas Distribuidora
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 8.66 times more return on investment than Sendas Distribuidora. However, Walgreens Boots is 8.66 times more volatile than Sendas Distribuidora SA. It trades about 0.09 of its potential returns per unit of risk. Sendas Distribuidora SA is currently generating about -0.58 per unit of risk. If you would invest 922.00 in Walgreens Boots Alliance on November 9, 2024 and sell it today you would earn a total of 83.00 from holding Walgreens Boots Alliance or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 15.0% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. Sendas Distribuidora SA
Performance |
| Timeline |
| Walgreens Boots Alliance |
| Sendas Distribuidora |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Walgreens Boots and Sendas Distribuidora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and Sendas Distribuidora
The main advantage of trading using opposite Walgreens Boots and Sendas Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Sendas Distribuidora 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 Sendas Distribuidora will offset losses from the drop in Sendas Distribuidora'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 |
| Sendas Distribuidora vs. Village Super Market | Sendas Distribuidora vs. Weis Markets | Sendas Distribuidora vs. Ingles Markets Incorporated | Sendas Distribuidora vs. Grocery Outlet Holding |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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