Correlation Between Walgreens Boots and SCOTTIE RESOURCES

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

Diversification Opportunities for Walgreens Boots and SCOTTIE RESOURCES

-0.43

Correlation Coefficient

Walgreens Boots  SCOTTIE RESOURCES

Very good diversification

The 3 months correlation between Walgreens and SCOTTIE is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and SCOTTIE RESOURCES P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTTIE RESOURCES 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 SCOTTIE RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTTIE RESOURCES has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and SCOTTIE RESOURCES go up and down completely randomly.

Pair Corralation between Walgreens Boots and SCOTTIE RESOURCES

Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 0.26 times more return on investment than SCOTTIE RESOURCES. However, Walgreens Boots Alliance is 3.87 times less risky than SCOTTIE RESOURCES. It trades about 0.06 of its potential returns per unit of risk. SCOTTIE RESOURCES P is currently generating about -0.24 per unit of risk. If you would invest  898.00  in Walgreens Boots Alliance on October 3, 2024 and sell it today you would earn a total of  35.00  from holding Walgreens Boots Alliance or generate 3.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.71%
Values	Daily Returns

Walgreens Boots Alliance  vs.  SCOTTIE RESOURCES P

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.

SCOTTIE RESOURCES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCOTTIE RESOURCES P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Walgreens Boots and SCOTTIE RESOURCES

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

The idea behind Walgreens Boots Alliance and SCOTTIE RESOURCES P 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.