Correlation Between Walgreens Boots and Thurgauer Kantonalbank
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Thurgauer Kantonalbank 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 Thurgauer Kantonalbank 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 Thurgauer Kantonalbank, you can compare the effects of market volatilities on Walgreens Boots and Thurgauer Kantonalbank 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 Thurgauer Kantonalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Thurgauer Kantonalbank.
Diversification Opportunities for Walgreens Boots and Thurgauer Kantonalbank
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Walgreens and Thurgauer is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Thurgauer Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thurgauer Kantonalbank 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 Thurgauer Kantonalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thurgauer Kantonalbank has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Thurgauer Kantonalbank go up and down completely randomly.
Pair Corralation between Walgreens Boots and Thurgauer Kantonalbank
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to under-perform the Thurgauer Kantonalbank. In addition to that, Walgreens Boots is 3.64 times more volatile than Thurgauer Kantonalbank. It trades about -0.1 of its total potential returns per unit of risk. Thurgauer Kantonalbank is currently generating about 0.04 per unit of volatility. If you would invest 11,642 in Thurgauer Kantonalbank on September 25, 2024 and sell it today you would earn a total of 1,008 from holding Thurgauer Kantonalbank or generate 8.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.6% |
Values | Daily Returns |
Walgreens Boots Alliance vs. Thurgauer Kantonalbank
Performance |
Timeline |
Walgreens Boots Alliance |
Thurgauer Kantonalbank |
Walgreens Boots and Thurgauer Kantonalbank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walgreens Boots and Thurgauer Kantonalbank
The main advantage of trading using opposite Walgreens Boots and Thurgauer Kantonalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Thurgauer Kantonalbank 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 Thurgauer Kantonalbank will offset losses from the drop in Thurgauer Kantonalbank'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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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