Correlation Between Walgreens Boots and Vest Bitcoin

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

Diversification Opportunities for Walgreens Boots and Vest Bitcoin

0.45

Correlation Coefficient

Walgreens Boots  Vest Bitcoin

Very weak diversification

The 3 months correlation between Walgreens and Vest is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Vest Bitcoin Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vest Bitcoin Strategy 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 Vest Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vest Bitcoin Strategy has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Vest Bitcoin go up and down completely randomly.

Pair Corralation between Walgreens Boots and Vest Bitcoin

Considering the 90-day investment horizon Walgreens Boots is expected to generate 4.72 times less return on investment than Vest Bitcoin. But when comparing it to its historical volatility, Walgreens Boots Alliance is 1.55 times less risky than Vest Bitcoin. It trades about 0.05 of its potential returns per unit of risk. Vest Bitcoin Strategy is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,128  in Vest Bitcoin Strategy on September 27, 2024 and sell it today you would earn a total of  866.00  from holding Vest Bitcoin Strategy or generate 40.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.67%
Values	Daily Returns

Walgreens Boots Alliance  vs.  Vest Bitcoin Strategy

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 weak fundamental drivers, Walgreens Boots may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vest Bitcoin Strategy

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vest Bitcoin Strategy are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vest Bitcoin showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walgreens Boots and Vest Bitcoin

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

The idea behind Walgreens Boots Alliance and Vest Bitcoin Strategy 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.