Correlation Between Walgreens Boots and Loomis AB
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Loomis AB 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 Loomis AB 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 Loomis AB, you can compare the effects of market volatilities on Walgreens Boots and Loomis AB 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 Loomis AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Loomis AB.
Diversification Opportunities for Walgreens Boots and Loomis AB
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Walgreens and Loomis is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Loomis AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis AB 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 Loomis AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loomis AB has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Loomis AB go up and down completely randomly.
Pair Corralation between Walgreens Boots and Loomis AB
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to under-perform the Loomis AB. In addition to that, Walgreens Boots is 1.04 times more volatile than Loomis AB. It trades about -0.08 of its total potential returns per unit of risk. Loomis AB is currently generating about 0.05 per unit of volatility. If you would invest 2,430 in Loomis AB on September 14, 2024 and sell it today you would earn a total of 768.00 from holding Loomis AB or generate 31.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 61.13% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. Loomis AB
Performance |
| Timeline |
| Walgreens Boots Alliance |
| Loomis AB |
Walgreens Boots and Loomis AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and Loomis AB
The main advantage of trading using opposite Walgreens Boots and Loomis AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Loomis AB 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 Loomis AB will offset losses from the drop in Loomis AB'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 |
| Loomis AB vs. Allegion PLC | Loomis AB vs. MSA Safety | Loomis AB vs. Resideo Technologies | Loomis AB vs. NL Industries |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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