Correlation Between Walgreens Boots and Catalyst Enhanced
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Catalyst Enhanced 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 Catalyst Enhanced 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 Catalyst Enhanced Income, you can compare the effects of market volatilities on Walgreens Boots and Catalyst Enhanced 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 Catalyst Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Catalyst Enhanced.
Diversification Opportunities for Walgreens Boots and Catalyst Enhanced
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walgreens and Catalyst is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Catalyst Enhanced Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Enhanced Income 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 Catalyst Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Enhanced Income has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Catalyst Enhanced go up and down completely randomly.
Pair Corralation between Walgreens Boots and Catalyst Enhanced
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 17.39 times more return on investment than Catalyst Enhanced. However, Walgreens Boots is 17.39 times more volatile than Catalyst Enhanced Income. It trades about 0.02 of its potential returns per unit of risk. Catalyst Enhanced Income is currently generating about -0.08 per unit of risk. If you would invest 1,016 in Walgreens Boots Alliance on November 3, 2024 and sell it today you would earn a total of 12.00 from holding Walgreens Boots Alliance or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. Catalyst Enhanced Income
Performance |
| Timeline |
| Walgreens Boots Alliance |
| Catalyst Enhanced Income |
Walgreens Boots and Catalyst Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and Catalyst Enhanced
The main advantage of trading using opposite Walgreens Boots and Catalyst Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Catalyst Enhanced 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 Catalyst Enhanced will offset losses from the drop in Catalyst Enhanced'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 |
| Catalyst Enhanced vs. Blackrock Strategic Income | Catalyst Enhanced vs. Blackrock Strategic Opps | Catalyst Enhanced vs. Blackrock Strategic Opps | Catalyst Enhanced vs. Blackrock Strategic Income |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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