Correlation Between Walgreens Boots and BANK MANDIRI

Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and BANK MANDIRI 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 BANK MANDIRI 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 BANK MANDIRI, you can compare the effects of market volatilities on Walgreens Boots and BANK MANDIRI 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 BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and BANK MANDIRI.

Diversification Opportunities for Walgreens Boots and BANK MANDIRI

0.01

Correlation Coefficient

Walgreens Boots  BANK MANDIRI

Significant diversification

The 3 months correlation between Walgreens and BANK is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI 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 BANK MANDIRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK MANDIRI has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and BANK MANDIRI go up and down completely randomly.

Pair Corralation between Walgreens Boots and BANK MANDIRI

Assuming the 90 days horizon Walgreens Boots Alliance is expected to under-perform the BANK MANDIRI. In addition to that, Walgreens Boots is 1.28 times more volatile than BANK MANDIRI. It trades about -0.09 of its total potential returns per unit of risk. BANK MANDIRI is currently generating about 0.03 per unit of volatility. If you would invest  30.00  in BANK MANDIRI on September 5, 2024 and sell it today you would earn a total of  5.00  from holding BANK MANDIRI or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Walgreens Boots Alliance  vs.  BANK MANDIRI

Walgreens Boots Alliance

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Walgreens Boots Alliance are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Walgreens Boots reported solid returns over the last few months and may actually be approaching a breakup point.

BANK MANDIRI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK MANDIRI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Walgreens Boots and BANK MANDIRI

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

The idea behind Walgreens Boots Alliance and BANK MANDIRI 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.