Correlation Between Walgreens Boots and Mobile Tornado

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

Diversification Opportunities for Walgreens Boots and Mobile Tornado

-0.02

Correlation Coefficient

Walgreens Boots  Mobile Tornado

Good diversification

The 3 months correlation between Walgreens and Mobile is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Mobile Tornado Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Tornado Group 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 Mobile Tornado. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Tornado Group has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Mobile Tornado go up and down completely randomly.

Pair Corralation between Walgreens Boots and Mobile Tornado

Considering the 90-day investment horizon Walgreens Boots Alliance is expected to under-perform the Mobile Tornado. But the stock apears to be less risky and, when comparing its historical volatility, Walgreens Boots Alliance is 4.07 times less risky than Mobile Tornado. The stock trades about -0.06 of its potential returns per unit of risk. The Mobile Tornado Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  100.00  in Mobile Tornado Group on September 28, 2024 and sell it today you would earn a total of  40.00  from holding Mobile Tornado Group or generate 40.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Walgreens Boots Alliance  vs.  Mobile Tornado Group

Walgreens Boots Alliance

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walgreens Boots Alliance are ranked lower than 3 (%) 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.

Mobile Tornado Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mobile Tornado Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Mobile Tornado exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walgreens Boots and Mobile Tornado

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

The idea behind Walgreens Boots Alliance and Mobile Tornado Group 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.