Correlation Between Walgreens Boots and Wattanapat Hospital
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Wattanapat Hospital 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 Wattanapat Hospital 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 Wattanapat Hospital Trang, you can compare the effects of market volatilities on Walgreens Boots and Wattanapat Hospital 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 Wattanapat Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Wattanapat Hospital.
Diversification Opportunities for Walgreens Boots and Wattanapat Hospital
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walgreens and Wattanapat is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Wattanapat Hospital Trang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wattanapat Hospital Trang 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 Wattanapat Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wattanapat Hospital Trang has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Wattanapat Hospital go up and down completely randomly.
Pair Corralation between Walgreens Boots and Wattanapat Hospital
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 3.31 times more return on investment than Wattanapat Hospital. However, Walgreens Boots is 3.31 times more volatile than Wattanapat Hospital Trang. It trades about 0.25 of its potential returns per unit of risk. Wattanapat Hospital Trang is currently generating about -0.09 per unit of risk. If you would invest 935.00 in Walgreens Boots Alliance on October 20, 2024 and sell it today you would earn a total of 317.00 from holding Walgreens Boots Alliance or generate 33.9% 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. Wattanapat Hospital Trang
Performance |
Timeline |
Walgreens Boots Alliance |
Wattanapat Hospital Trang |
Walgreens Boots and Wattanapat Hospital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walgreens Boots and Wattanapat Hospital
The main advantage of trading using opposite Walgreens Boots and Wattanapat Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Wattanapat Hospital 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 Wattanapat Hospital will offset losses from the drop in Wattanapat Hospital's long position.Walgreens Boots vs. PetMed Express | Walgreens Boots vs. 111 Inc | Walgreens Boots vs. China Jo Jo Drugstores | Walgreens Boots vs. High Tide |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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