Correlation Between Walgreens Boots and Intercontinental
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Intercontinental 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 Intercontinental 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 Intercontinental Exchange, you can compare the effects of market volatilities on Walgreens Boots and Intercontinental 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 Intercontinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Intercontinental.
Diversification Opportunities for Walgreens Boots and Intercontinental
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walgreens and Intercontinental is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Intercontinental Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercontinental Exchange 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 Intercontinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercontinental Exchange has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Intercontinental go up and down completely randomly.
Pair Corralation between Walgreens Boots and Intercontinental
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 5.07 times more return on investment than Intercontinental. However, Walgreens Boots is 5.07 times more volatile than Intercontinental Exchange. It trades about 0.09 of its potential returns per unit of risk. Intercontinental Exchange is currently generating about 0.07 per unit of risk. If you would invest 911.00 in Walgreens Boots Alliance on September 12, 2024 and sell it today you would earn a total of 73.00 from holding Walgreens Boots Alliance or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. Intercontinental Exchange
Performance |
| Timeline |
| Walgreens Boots Alliance |
| Intercontinental Exchange |
Walgreens Boots and Intercontinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and Intercontinental
The main advantage of trading using opposite Walgreens Boots and Intercontinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Intercontinental 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 Intercontinental will offset losses from the drop in Intercontinental'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 |
| Intercontinental vs. Bumrungrad Hospital Public | Intercontinental vs. Virtus Investment Partners | Intercontinental vs. DiamondRock Hospitality | Intercontinental vs. YOOMA WELLNESS INC |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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