Correlation Between Walgreens Boots and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Lundin Mining 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 Lundin Mining 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 Lundin Mining, you can compare the effects of market volatilities on Walgreens Boots and Lundin Mining 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 Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Lundin Mining.
Diversification Opportunities for Walgreens Boots and Lundin Mining
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walgreens and Lundin is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining 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 Lundin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mining has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Lundin Mining go up and down completely randomly.
Pair Corralation between Walgreens Boots and Lundin Mining
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 1.92 times more return on investment than Lundin Mining. However, Walgreens Boots is 1.92 times more volatile than Lundin Mining. It trades about 0.06 of its potential returns per unit of risk. Lundin Mining is currently generating about 0.0 per unit of risk. If you would invest 848.00 in Walgreens Boots Alliance on December 4, 2024 and sell it today you would earn a total of 178.00 from holding Walgreens Boots Alliance or generate 20.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. Lundin Mining
Performance |
| Timeline |
| Walgreens Boots Alliance |
| Lundin Mining |
Walgreens Boots and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and Lundin Mining
The main advantage of trading using opposite Walgreens Boots and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Lundin Mining 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 Lundin Mining will offset losses from the drop in Lundin Mining'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 |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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