Correlation Between Walgreens Boots and Engie Energia
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Engie Energia 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 Engie Energia 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 Engie Energia Chile, you can compare the effects of market volatilities on Walgreens Boots and Engie Energia 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 Engie Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Engie Energia.
Diversification Opportunities for Walgreens Boots and Engie Energia
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Walgreens and Engie is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Engie Energia Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Engie Energia Chile 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 Engie Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Engie Energia Chile has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Engie Energia go up and down completely randomly.
Pair Corralation between Walgreens Boots and Engie Energia
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 4.14 times more return on investment than Engie Energia. However, Walgreens Boots is 4.14 times more volatile than Engie Energia Chile. It trades about 0.05 of its potential returns per unit of risk. Engie Energia Chile is currently generating about 0.02 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. Engie Energia Chile
Performance |
| Timeline |
| Walgreens Boots Alliance |
| Engie Energia Chile |
Walgreens Boots and Engie Energia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and Engie Energia
The main advantage of trading using opposite Walgreens Boots and Engie Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Engie Energia 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 Engie Energia will offset losses from the drop in Engie Energia's long position.| Walgreens Boots vs. Leafly Holdings | Walgreens Boots vs. WM Technology | Walgreens Boots vs. Revelation Biosciences | Walgreens Boots vs. AEye Inc |
| Engie Energia vs. Colbun | Engie Energia vs. Enel Chile SA | Engie Energia vs. CAP SA | Engie Energia vs. Enel Amricas SA |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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