Correlation Between Walgreens Boots and FIRST TRUST
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and FIRST TRUST 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 FIRST TRUST 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 FIRST TRUST GLOBAL, you can compare the effects of market volatilities on Walgreens Boots and FIRST TRUST 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 FIRST TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and FIRST TRUST.
Diversification Opportunities for Walgreens Boots and FIRST TRUST
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Walgreens and FIRST is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and FIRST TRUST GLOBAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST TRUST GLOBAL 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 FIRST TRUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST TRUST GLOBAL has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and FIRST TRUST go up and down completely randomly.
Pair Corralation between Walgreens Boots and FIRST TRUST
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 8.92 times more return on investment than FIRST TRUST. However, Walgreens Boots is 8.92 times more volatile than FIRST TRUST GLOBAL. It trades about 0.05 of its potential returns per unit of risk. FIRST TRUST GLOBAL is currently generating about -0.36 per unit of risk. If you would invest 906.00 in Walgreens Boots Alliance on September 24, 2024 and sell it today you would earn a total of 24.00 from holding Walgreens Boots Alliance or generate 2.65% 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. FIRST TRUST GLOBAL
Performance |
| Timeline |
| Walgreens Boots Alliance |
| FIRST TRUST GLOBAL |
Walgreens Boots and FIRST TRUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and FIRST TRUST
The main advantage of trading using opposite Walgreens Boots and FIRST TRUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, FIRST TRUST 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 FIRST TRUST will offset losses from the drop in FIRST TRUST's long position.| Walgreens Boots vs. Leafly Holdings | Walgreens Boots vs. WM Technology | Walgreens Boots vs. Revelation Biosciences | Walgreens Boots vs. AEye Inc |
| FIRST TRUST vs. Vanguard FTSE Developed | FIRST TRUST vs. Leverage Shares 2x | FIRST TRUST vs. Amundi Index Solutions | FIRST TRUST vs. Amundi Index Solutions |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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