Correlation Between Walgreens Boots and SPDR Galaxy
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and SPDR Galaxy 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 SPDR Galaxy 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 SPDR Galaxy Digital, you can compare the effects of market volatilities on Walgreens Boots and SPDR Galaxy 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 SPDR Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and SPDR Galaxy.
Diversification Opportunities for Walgreens Boots and SPDR Galaxy
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walgreens and SPDR is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and SPDR Galaxy Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Galaxy Digital 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 SPDR Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Galaxy Digital has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and SPDR Galaxy go up and down completely randomly.
Pair Corralation between Walgreens Boots and SPDR Galaxy
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 1.46 times more return on investment than SPDR Galaxy. However, Walgreens Boots is 1.46 times more volatile than SPDR Galaxy Digital. It trades about 0.09 of its potential returns per unit of risk. SPDR Galaxy Digital is currently generating about -0.27 per unit of risk. If you would invest 989.00 in Walgreens Boots Alliance on December 6, 2024 and sell it today you would earn a total of 72.50 from holding Walgreens Boots Alliance or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. SPDR Galaxy Digital
Performance |
| Timeline |
| Walgreens Boots Alliance |
| SPDR Galaxy Digital |
Walgreens Boots and SPDR Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and SPDR Galaxy
The main advantage of trading using opposite Walgreens Boots and SPDR Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, SPDR Galaxy 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 SPDR Galaxy will offset losses from the drop in SPDR Galaxy'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 |
| SPDR Galaxy vs. Strategy Shares | SPDR Galaxy vs. Freedom Day Dividend | SPDR Galaxy vs. Franklin Templeton ETF | SPDR Galaxy vs. iShares MSCI China |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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