Correlation Between Walgreens Boots and Comcast Holdings

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

Diversification Opportunities for Walgreens Boots and Comcast Holdings

0.32

Correlation Coefficient

Walgreens Boots  Comcast Holdings

Weak diversification

The 3 months correlation between Walgreens and Comcast is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Comcast Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast Holdings Corp 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 Comcast Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast Holdings Corp has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Comcast Holdings go up and down completely randomly.

Pair Corralation between Walgreens Boots and Comcast Holdings

Considering the 90-day investment horizon Walgreens Boots Alliance is expected to under-perform the Comcast Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Walgreens Boots Alliance is 55.85 times less risky than Comcast Holdings. The stock trades about -0.01 of its potential returns per unit of risk. The Comcast Holdings Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  5,849  in Comcast Holdings Corp on September 29, 2024 and sell it today you would earn a total of  258.00  from holding Comcast Holdings Corp or generate 4.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	60.32%
Values	Daily Returns

Walgreens Boots Alliance  vs.  Comcast Holdings Corp

Walgreens Boots Alliance

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walgreens Boots Alliance are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Walgreens Boots sustained solid returns over the last few months and may actually be approaching a breakup point.

Comcast Holdings Corp

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Comcast Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Comcast Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walgreens Boots and Comcast Holdings

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

The idea behind Walgreens Boots Alliance and Comcast Holdings Corp 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.