Correlation Between Walgreens Boots and SNC Former

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

Diversification Opportunities for Walgreens Boots and SNC Former

-0.06

Correlation Coefficient

Walgreens Boots  SNC Former

Good diversification

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

Pair Corralation between Walgreens Boots and SNC Former

Considering the 90-day investment horizon Walgreens Boots is expected to generate 6156.75 times less return on investment than SNC Former. But when comparing it to its historical volatility, Walgreens Boots Alliance is 25.88 times less risky than SNC Former. It trades about 0.0 of its potential returns per unit of risk. SNC Former Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  645.00  in SNC Former Public on October 7, 2024 and sell it today you would lose (75.00) from holding SNC Former Public or give up 11.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.03%
Values	Daily Returns

Walgreens Boots Alliance  vs.  SNC Former Public

Walgreens Boots Alliance

Risk-Adjusted Performance

4 of 100

Insignificant

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.

SNC Former Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SNC Former Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, SNC Former is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Walgreens Boots and SNC Former

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

The idea behind Walgreens Boots Alliance and SNC Former 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.