Correlation Between Walgreens Boots and Genolution
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Genolution 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 Genolution 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 Genolution, you can compare the effects of market volatilities on Walgreens Boots and Genolution 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 Genolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Genolution.
Diversification Opportunities for Walgreens Boots and Genolution
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walgreens and Genolution is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Genolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genolution 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 Genolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genolution has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Genolution go up and down completely randomly.
Pair Corralation between Walgreens Boots and Genolution
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 1.75 times more return on investment than Genolution. However, Walgreens Boots is 1.75 times more volatile than Genolution. It trades about 0.09 of its potential returns per unit of risk. Genolution is currently generating about -0.23 per unit of risk. If you would invest 801.00 in Walgreens Boots Alliance on September 25, 2024 and sell it today you would earn a total of 154.00 from holding Walgreens Boots Alliance or generate 19.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.83% |
Values | Daily Returns |
Walgreens Boots Alliance vs. Genolution
Performance |
Timeline |
Walgreens Boots Alliance |
Genolution |
Walgreens Boots and Genolution Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walgreens Boots and Genolution
The main advantage of trading using opposite Walgreens Boots and Genolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Genolution 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 Genolution will offset losses from the drop in Genolution's long position.Walgreens Boots vs. Leafly Holdings | Walgreens Boots vs. WM Technology | Walgreens Boots vs. Revelation Biosciences | Walgreens Boots vs. AEye Inc |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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