Correlation Between Walgreens Boots and SHINHAN FINL
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and SHINHAN FINL 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 SHINHAN FINL 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 SHINHAN FINL ADR1, you can compare the effects of market volatilities on Walgreens Boots and SHINHAN FINL 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 SHINHAN FINL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and SHINHAN FINL.
Diversification Opportunities for Walgreens Boots and SHINHAN FINL
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walgreens and SHINHAN is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and SHINHAN FINL ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHINHAN FINL ADR1 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 SHINHAN FINL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHINHAN FINL ADR1 has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and SHINHAN FINL go up and down completely randomly.
Pair Corralation between Walgreens Boots and SHINHAN FINL
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to under-perform the SHINHAN FINL. In addition to that, Walgreens Boots is 1.38 times more volatile than SHINHAN FINL ADR1. It trades about -0.03 of its total potential returns per unit of risk. SHINHAN FINL ADR1 is currently generating about 0.02 per unit of volatility. If you would invest 3,148 in SHINHAN FINL ADR1 on September 26, 2024 and sell it today you would earn a total of 72.00 from holding SHINHAN FINL ADR1 or generate 2.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 97.66% |
Values | Daily Returns |
Walgreens Boots Alliance vs. SHINHAN FINL ADR1
Performance |
Timeline |
Walgreens Boots Alliance |
SHINHAN FINL ADR1 |
Walgreens Boots and SHINHAN FINL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walgreens Boots and SHINHAN FINL
The main advantage of trading using opposite Walgreens Boots and SHINHAN FINL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, SHINHAN FINL 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 SHINHAN FINL will offset losses from the drop in SHINHAN FINL'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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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