Correlation Between Walgreens Boots and Altegris Futures

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

Diversification Opportunities for Walgreens Boots and Altegris Futures

-0.17

Correlation Coefficient

Walgreens Boots  Altegris Futures

Good diversification

The 3 months correlation between Walgreens and Altegris is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Altegris Futures Evolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altegris Futures Evo 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 Altegris Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altegris Futures Evo has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Altegris Futures go up and down completely randomly.

Pair Corralation between Walgreens Boots and Altegris Futures

Considering the 90-day investment horizon Walgreens Boots Alliance is expected to under-perform the Altegris Futures. In addition to that, Walgreens Boots is 6.25 times more volatile than Altegris Futures Evolution. It trades about -0.05 of its total potential returns per unit of risk. Altegris Futures Evolution is currently generating about 0.02 per unit of volatility. If you would invest  672.00  in Altegris Futures Evolution on September 15, 2024 and sell it today you would earn a total of  17.00  from holding Altegris Futures Evolution or generate 2.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Walgreens Boots Alliance  vs.  Altegris Futures Evolution

Walgreens Boots Alliance

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Walgreens Boots Alliance are ranked lower than 6 (%) 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.

Altegris Futures Evo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altegris Futures Evolution has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Altegris Futures is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walgreens Boots and Altegris Futures

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

The idea behind Walgreens Boots Alliance and Altegris Futures Evolution 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.