Correlation Between Walgreens Boots and NewtekOne, 850

Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and NewtekOne, 850 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 NewtekOne, 850 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 NewtekOne, 850 percent, you can compare the effects of market volatilities on Walgreens Boots and NewtekOne, 850 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 NewtekOne, 850. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and NewtekOne, 850.

Diversification Opportunities for Walgreens Boots and NewtekOne, 850

-0.21

Correlation Coefficient

Walgreens Boots  NewtekOne, 850

Very good diversification

The 3 months correlation between Walgreens and NewtekOne, is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and NewtekOne, 850 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewtekOne, 850 percent 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 NewtekOne, 850. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewtekOne, 850 percent has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and NewtekOne, 850 go up and down completely randomly.

Pair Corralation between Walgreens Boots and NewtekOne, 850

Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 18.22 times more return on investment than NewtekOne, 850. However, Walgreens Boots is 18.22 times more volatile than NewtekOne, 850 percent. It trades about 0.08 of its potential returns per unit of risk. NewtekOne, 850 percent is currently generating about 0.01 per unit of risk. If you would invest  926.00  in Walgreens Boots Alliance on December 30, 2024 and sell it today you would earn a total of  193.00  from holding Walgreens Boots Alliance or generate 20.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Walgreens Boots Alliance  vs.  NewtekOne, 850 percent

Walgreens Boots Alliance

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Walgreens Boots Alliance are ranked lower than 6 (%) 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.

NewtekOne, 850 percent

Risk-Adjusted Performance

Very Weak

Over the last 90 days NewtekOne, 850 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NewtekOne, 850 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Walgreens Boots and NewtekOne, 850

The main advantage of trading using opposite Walgreens Boots and NewtekOne, 850 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, NewtekOne, 850 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 NewtekOne, 850 will offset losses from the drop in NewtekOne, 850's long position.

The idea behind Walgreens Boots Alliance and NewtekOne, 850 percent 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.