Correlation Between Bimi International and Walgreens Boots

Can any of the company-specific risk be diversified away by investing in both Bimi International and Walgreens Boots 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 Bimi International and Walgreens Boots into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bimi International Medical and Walgreens Boots Alliance, you can compare the effects of market volatilities on Bimi International and Walgreens Boots 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 Bimi International with a short position of Walgreens Boots. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bimi International and Walgreens Boots.

Diversification Opportunities for Bimi International and Walgreens Boots

0.05

Correlation Coefficient

Bimi International  Walgreens Boots

Significant diversification

The 3 months correlation between Bimi and Walgreens is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bimi International Medical and Walgreens Boots Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walgreens Boots Alliance and Bimi International 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 Bimi International Medical are associated (or correlated) with Walgreens Boots. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walgreens Boots Alliance has no effect on the direction of Bimi International i.e., Bimi International and Walgreens Boots go up and down completely randomly.

Pair Corralation between Bimi International and Walgreens Boots

If you would invest  871.00  in Walgreens Boots Alliance on September 3, 2024 and sell it today you would earn a total of  31.00  from holding Walgreens Boots Alliance or generate 3.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Bimi International Medical  vs.  Walgreens Boots Alliance

Bimi International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bimi International Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, Bimi International is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Walgreens Boots Alliance

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Walgreens Boots Alliance are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental drivers, Walgreens Boots may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bimi International and Walgreens Boots

The main advantage of trading using opposite Bimi International and Walgreens Boots positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bimi International position performs unexpectedly, Walgreens Boots 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 Walgreens Boots will offset losses from the drop in Walgreens Boots' long position.

The idea behind Bimi International Medical and Walgreens Boots Alliance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.