Correlation Between Walgreens Boots and LPI Capital
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and LPI Capital 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 LPI Capital 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 LPI Capital Bhd, you can compare the effects of market volatilities on Walgreens Boots and LPI Capital 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 LPI Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and LPI Capital.
Diversification Opportunities for Walgreens Boots and LPI Capital
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walgreens and LPI is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and LPI Capital Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPI Capital Bhd 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 LPI Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPI Capital Bhd has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and LPI Capital go up and down completely randomly.
Pair Corralation between Walgreens Boots and LPI Capital
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 4.65 times more return on investment than LPI Capital. However, Walgreens Boots is 4.65 times more volatile than LPI Capital Bhd. It trades about 0.06 of its potential returns per unit of risk. LPI Capital Bhd is currently generating about -0.06 per unit of risk. If you would invest 827.00 in Walgreens Boots Alliance on September 26, 2024 and sell it today you would earn a total of 92.00 from holding Walgreens Boots Alliance or generate 11.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Walgreens Boots Alliance vs. LPI Capital Bhd
Performance |
Timeline |
Walgreens Boots Alliance |
LPI Capital Bhd |
Walgreens Boots and LPI Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walgreens Boots and LPI Capital
The main advantage of trading using opposite Walgreens Boots and LPI Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, LPI Capital 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 LPI Capital will offset losses from the drop in LPI Capital's long position.Walgreens Boots vs. Leafly Holdings | Walgreens Boots vs. WM Technology | Walgreens Boots vs. Revelation Biosciences | Walgreens Boots vs. AEye Inc |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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