Correlation Between Walgreens Boots and Logindo Samudramakmur
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Logindo Samudramakmur 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 Logindo Samudramakmur 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 Logindo Samudramakmur Tbk, you can compare the effects of market volatilities on Walgreens Boots and Logindo Samudramakmur 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 Logindo Samudramakmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Logindo Samudramakmur.
Diversification Opportunities for Walgreens Boots and Logindo Samudramakmur
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Walgreens and Logindo is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Logindo Samudramakmur Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logindo Samudramakmur Tbk 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 Logindo Samudramakmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logindo Samudramakmur Tbk has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Logindo Samudramakmur go up and down completely randomly.
Pair Corralation between Walgreens Boots and Logindo Samudramakmur
Considering the 90-day investment horizon Walgreens Boots is expected to generate 1.32 times less return on investment than Logindo Samudramakmur. But when comparing it to its historical volatility, Walgreens Boots Alliance is 1.23 times less risky than Logindo Samudramakmur. It trades about 0.08 of its potential returns per unit of risk. Logindo Samudramakmur Tbk is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9,400 in Logindo Samudramakmur Tbk on September 18, 2024 and sell it today you would earn a total of 2,000 from holding Logindo Samudramakmur Tbk or generate 21.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Walgreens Boots Alliance vs. Logindo Samudramakmur Tbk
Performance |
Timeline |
Walgreens Boots Alliance |
Logindo Samudramakmur Tbk |
Walgreens Boots and Logindo Samudramakmur Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walgreens Boots and Logindo Samudramakmur
The main advantage of trading using opposite Walgreens Boots and Logindo Samudramakmur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Logindo Samudramakmur 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 Logindo Samudramakmur will offset losses from the drop in Logindo Samudramakmur's long position.Walgreens Boots vs. SunLink Health Systems | Walgreens Boots vs. Kiaro Holdings Corp | Walgreens Boots vs. Leafly Holdings | Walgreens Boots vs. China Jo Jo Drugstores |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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