Correlation Between Walgreens Boots and Caldas Gold
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Caldas Gold 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 Caldas Gold 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 Caldas Gold, you can compare the effects of market volatilities on Walgreens Boots and Caldas Gold 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 Caldas Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Caldas Gold.
Diversification Opportunities for Walgreens Boots and Caldas Gold
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Walgreens and Caldas is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Caldas Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caldas Gold 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 Caldas Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caldas Gold has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Caldas Gold go up and down completely randomly.
Pair Corralation between Walgreens Boots and Caldas Gold
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to under-perform the Caldas Gold. But the stock apears to be less risky and, when comparing its historical volatility, Walgreens Boots Alliance is 91.52 times less risky than Caldas Gold. The stock trades about -0.07 of its potential returns per unit of risk. The Caldas Gold is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 29.00 in Caldas Gold on September 14, 2024 and sell it today you would lose (11.00) from holding Caldas Gold or give up 37.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 6.26% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. Caldas Gold
Performance |
| Timeline |
| Walgreens Boots Alliance |
| Caldas Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walgreens Boots and Caldas Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and Caldas Gold
The main advantage of trading using opposite Walgreens Boots and Caldas Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Caldas Gold 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 Caldas Gold will offset losses from the drop in Caldas Gold'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 |
| Caldas Gold vs. SunLink Health Systems | Caldas Gold vs. Asbury Automotive Group | Caldas Gold vs. Radcom | Caldas Gold vs. US Global Investors |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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