Correlation Between Wendys and WALGREENS
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By analyzing existing cross correlation between The Wendys Co and WALGREENS BOOTS ALLIANCE, you can compare the effects of market volatilities on Wendys and WALGREENS 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 Wendys with a short position of WALGREENS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wendys and WALGREENS.
Diversification Opportunities for Wendys and WALGREENS
Poor diversification
The 3 months correlation between Wendys and WALGREENS is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Wendys Co and WALGREENS BOOTS ALLIANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WALGREENS BOOTS ALLIANCE and Wendys 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 The Wendys Co are associated (or correlated) with WALGREENS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WALGREENS BOOTS ALLIANCE has no effect on the direction of Wendys i.e., Wendys and WALGREENS go up and down completely randomly.
Pair Corralation between Wendys and WALGREENS
Considering the 90-day investment horizon The Wendys Co is expected to generate 5.85 times more return on investment than WALGREENS. However, Wendys is 5.85 times more volatile than WALGREENS BOOTS ALLIANCE. It trades about 0.05 of its potential returns per unit of risk. WALGREENS BOOTS ALLIANCE is currently generating about -0.09 per unit of risk. If you would invest 1,660 in The Wendys Co on September 11, 2024 and sell it today you would earn a total of 88.00 from holding The Wendys Co or generate 5.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 73.44% |
Values | Daily Returns |
The Wendys Co vs. WALGREENS BOOTS ALLIANCE
Performance |
Timeline |
The Wendys |
WALGREENS BOOTS ALLIANCE |
Wendys and WALGREENS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wendys and WALGREENS
The main advantage of trading using opposite Wendys and WALGREENS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wendys position performs unexpectedly, WALGREENS 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 WALGREENS will offset losses from the drop in WALGREENS's long position.Wendys vs. Yum Brands | Wendys vs. Dominos Pizza | Wendys vs. Darden Restaurants | Wendys vs. Papa Johns International |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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