Correlation Between Walgreens Boots and DOW JONES
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and DOW JONES 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 DOW JONES 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 DOW JONES EQUITY, you can compare the effects of market volatilities on Walgreens Boots and DOW JONES 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 DOW JONES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and DOW JONES.
Diversification Opportunities for Walgreens Boots and DOW JONES
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walgreens and DOW is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and DOW JONES EQUITY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DOW JONES EQUITY 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 DOW JONES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOW JONES EQUITY has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and DOW JONES go up and down completely randomly.
Pair Corralation between Walgreens Boots and DOW JONES
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 4.48 times more return on investment than DOW JONES. However, Walgreens Boots is 4.48 times more volatile than DOW JONES EQUITY. It trades about 0.05 of its potential returns per unit of risk. DOW JONES EQUITY is currently generating about -0.38 per unit of risk. If you would invest 906.00 in Walgreens Boots Alliance on September 24, 2024 and sell it today you would earn a total of 24.00 from holding Walgreens Boots Alliance or generate 2.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Walgreens Boots Alliance vs. DOW JONES EQUITY
Performance |
Timeline |
Walgreens Boots and DOW JONES Volatility Contrast
Predicted Return Density |
Returns |
Walgreens Boots Alliance
Pair trading matchups for Walgreens Boots
DOW JONES EQUITY
Pair trading matchups for DOW JONES
Pair Trading with Walgreens Boots and DOW JONES
The main advantage of trading using opposite Walgreens Boots and DOW JONES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, DOW JONES 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 DOW JONES will offset losses from the drop in DOW JONES's long position.Walgreens Boots vs. Leafly Holdings | Walgreens Boots vs. WM Technology | Walgreens Boots vs. Revelation Biosciences | Walgreens Boots vs. AEye Inc |
DOW JONES vs. SNDL Inc | DOW JONES vs. BJs Restaurants | DOW JONES vs. Chipotle Mexican Grill | DOW JONES vs. First Watch Restaurant |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
CEOs Directory Screen CEOs from public companies around the world | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |