Correlation Between Walgreens Boots and Chainflip
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Chainflip 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 Chainflip 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 Chainflip, you can compare the effects of market volatilities on Walgreens Boots and Chainflip 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 Chainflip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Chainflip.
Diversification Opportunities for Walgreens Boots and Chainflip
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walgreens and Chainflip is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Chainflip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chainflip 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 Chainflip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chainflip has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Chainflip go up and down completely randomly.
Pair Corralation between Walgreens Boots and Chainflip
Considering the 90-day investment horizon Walgreens Boots is expected to generate 4.65 times less return on investment than Chainflip. But when comparing it to its historical volatility, Walgreens Boots Alliance is 2.27 times less risky than Chainflip. It trades about 0.07 of its potential returns per unit of risk. Chainflip is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 114.00 in Chainflip on September 13, 2024 and sell it today you would earn a total of 72.00 from holding Chainflip or generate 63.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. Chainflip
Performance |
| Timeline |
| Walgreens Boots Alliance |
| Chainflip |
Walgreens Boots and Chainflip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and Chainflip
The main advantage of trading using opposite Walgreens Boots and Chainflip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Chainflip 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 Chainflip will offset losses from the drop in Chainflip'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 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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