Correlation Between Walgreens Boots and SiamEast Solutions

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

Diversification Opportunities for Walgreens Boots and SiamEast Solutions

-0.06

Correlation Coefficient

Walgreens Boots  SiamEast Solutions

Good diversification

The 3 months correlation between Walgreens and SiamEast is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and SiamEast Solutions Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SiamEast Solutions Public 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 SiamEast Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SiamEast Solutions Public has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and SiamEast Solutions go up and down completely randomly.

Pair Corralation between Walgreens Boots and SiamEast Solutions

Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 2.44 times more return on investment than SiamEast Solutions. However, Walgreens Boots is 2.44 times more volatile than SiamEast Solutions Public. It trades about 0.06 of its potential returns per unit of risk. SiamEast Solutions Public is currently generating about -0.19 per unit of risk. If you would invest  894.00  in Walgreens Boots Alliance on September 13, 2024 and sell it today you would earn a total of  90.00  from holding Walgreens Boots Alliance or generate 10.07% 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.  SiamEast Solutions Public

Walgreens Boots Alliance

Risk-Adjusted Performance

4 of 100

Modest

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 uncertain fundamental drivers, Walgreens Boots sustained solid returns over the last few months and may actually be approaching a breakup point.

SiamEast Solutions Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SiamEast Solutions Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Walgreens Boots and SiamEast Solutions

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

The idea behind Walgreens Boots Alliance and SiamEast Solutions Public 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.