Correlation Between Walgreens Boots and 21Shares Bitcoin

Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and 21Shares Bitcoin 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 21Shares Bitcoin 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 21Shares Bitcoin Suisse, you can compare the effects of market volatilities on Walgreens Boots and 21Shares Bitcoin 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 21Shares Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and 21Shares Bitcoin.

Diversification Opportunities for Walgreens Boots and 21Shares Bitcoin

0.2

Correlation Coefficient

Walgreens Boots  21Shares Bitcoin

Modest diversification

The 3 months correlation between Walgreens and 21Shares is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and 21Shares Bitcoin Suisse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 21Shares Bitcoin Suisse 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 21Shares Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 21Shares Bitcoin Suisse has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and 21Shares Bitcoin go up and down completely randomly.

Pair Corralation between Walgreens Boots and 21Shares Bitcoin

Considering the 90-day investment horizon Walgreens Boots Alliance is expected to under-perform the 21Shares Bitcoin. In addition to that, Walgreens Boots is 1.15 times more volatile than 21Shares Bitcoin Suisse. It trades about -0.03 of its total potential returns per unit of risk. 21Shares Bitcoin Suisse is currently generating about 0.09 per unit of volatility. If you would invest  2,037  in 21Shares Bitcoin Suisse on October 22, 2024 and sell it today you would earn a total of  1,532  from holding 21Shares Bitcoin Suisse or generate 75.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.68%
Values	Daily Returns

Walgreens Boots Alliance  vs.  21Shares Bitcoin Suisse

Walgreens Boots Alliance

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Walgreens Boots Alliance are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental drivers, Walgreens Boots sustained solid returns over the last few months and may actually be approaching a breakup point.

21Shares Bitcoin Suisse

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 21Shares Bitcoin Suisse are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, 21Shares Bitcoin showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walgreens Boots and 21Shares Bitcoin

The main advantage of trading using opposite Walgreens Boots and 21Shares Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, 21Shares Bitcoin 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 21Shares Bitcoin will offset losses from the drop in 21Shares Bitcoin's long position.

The idea behind Walgreens Boots Alliance and 21Shares Bitcoin Suisse 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..