Correlation Between Walgreens Boots and Vodafone Group
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Vodafone Group 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 Vodafone Group 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 Vodafone Group Plc, you can compare the effects of market volatilities on Walgreens Boots and Vodafone Group 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 Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Vodafone Group.
Diversification Opportunities for Walgreens Boots and Vodafone Group
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walgreens and Vodafone is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Vodafone Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodafone Group Plc 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 Vodafone Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodafone Group Plc has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Vodafone Group go up and down completely randomly.
Pair Corralation between Walgreens Boots and Vodafone Group
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 2.84 times more return on investment than Vodafone Group. However, Walgreens Boots is 2.84 times more volatile than Vodafone Group Plc. It trades about 0.09 of its potential returns per unit of risk. Vodafone Group Plc is currently generating about -0.13 per unit of risk. If you would invest 801.00 in Walgreens Boots Alliance on September 25, 2024 and sell it today you would earn a total of 154.00 from holding Walgreens Boots Alliance or generate 19.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.83% |
Values | Daily Returns |
Walgreens Boots Alliance vs. Vodafone Group Plc
Performance |
Timeline |
Walgreens Boots Alliance |
Vodafone Group Plc |
Walgreens Boots and Vodafone Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walgreens Boots and Vodafone Group
The main advantage of trading using opposite Walgreens Boots and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Vodafone Group 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 Vodafone Group will offset losses from the drop in Vodafone Group's long position.Walgreens Boots vs. Leafly Holdings | Walgreens Boots vs. WM Technology | Walgreens Boots vs. Revelation Biosciences | Walgreens Boots vs. AEye Inc |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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