Correlation Between Walgreens Boots and Equinor ASA
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Equinor ASA 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 Equinor ASA 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 Equinor ASA, you can compare the effects of market volatilities on Walgreens Boots and Equinor ASA 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 Equinor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Equinor ASA.
Diversification Opportunities for Walgreens Boots and Equinor ASA
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walgreens and Equinor is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Equinor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinor ASA 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 Equinor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinor ASA has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Equinor ASA go up and down completely randomly.
Pair Corralation between Walgreens Boots and Equinor ASA
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 2.79 times more return on investment than Equinor ASA. However, Walgreens Boots is 2.79 times more volatile than Equinor ASA. It trades about 0.13 of its potential returns per unit of risk. Equinor ASA is currently generating about -0.1 per unit of risk. If you would invest 866.00 in Walgreens Boots Alliance on September 19, 2024 and sell it today you would earn a total of 104.00 from holding Walgreens Boots Alliance or generate 12.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. Equinor ASA
Performance |
| Timeline |
| Walgreens Boots Alliance |
| Equinor ASA |
Walgreens Boots and Equinor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and Equinor ASA
The main advantage of trading using opposite Walgreens Boots and Equinor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Equinor ASA 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 Equinor ASA will offset losses from the drop in Equinor ASA's long position.| Walgreens Boots vs. SunLink Health Systems | Walgreens Boots vs. Kiaro Holdings Corp | Walgreens Boots vs. Leafly Holdings | Walgreens Boots vs. PetMed Express |
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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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