Correlation Between Walgreens Boots and Jean
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Jean 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 Jean 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 Jean Co, you can compare the effects of market volatilities on Walgreens Boots and Jean 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 Jean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Jean.
Diversification Opportunities for Walgreens Boots and Jean
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walgreens and Jean is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Jean Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jean 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 Jean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jean has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Jean go up and down completely randomly.
Pair Corralation between Walgreens Boots and Jean
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 1.21 times more return on investment than Jean. However, Walgreens Boots is 1.21 times more volatile than Jean Co. It trades about -0.01 of its potential returns per unit of risk. Jean Co is currently generating about -0.05 per unit of risk. If you would invest 1,098 in Walgreens Boots Alliance on September 29, 2024 and sell it today you would lose (136.00) from holding Walgreens Boots Alliance or give up 12.39% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 97.67% |
Values | Daily Returns |
Walgreens Boots Alliance vs. Jean Co
Performance |
Timeline |
Walgreens Boots Alliance |
Jean |
Walgreens Boots and Jean Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walgreens Boots and Jean
The main advantage of trading using opposite Walgreens Boots and Jean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Jean 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 Jean will offset losses from the drop in Jean's long position.Walgreens Boots vs. Leafly Holdings | Walgreens Boots vs. WM Technology | Walgreens Boots vs. Revelation Biosciences | Walgreens Boots vs. AEye Inc |
Jean vs. Shuttle | Jean vs. Amtran Technology Co | Jean vs. AVerMedia Technologies | Jean vs. Gigastorage Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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