Correlation Between Walgreens Boots and MBGGR

Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and MBGGR 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 MBGGR 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 MBGGR 145 02 MAR 26, you can compare the effects of market volatilities on Walgreens Boots and MBGGR 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 MBGGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and MBGGR.

Diversification Opportunities for Walgreens Boots and MBGGR

0.14

Correlation Coefficient

Walgreens Boots  MBGGR

Average diversification

The 3 months correlation between Walgreens and MBGGR is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and MBGGR 145 02 MAR 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBGGR 145 02 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 MBGGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBGGR 145 02 has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and MBGGR go up and down completely randomly.

Pair Corralation between Walgreens Boots and MBGGR

Considering the 90-day investment horizon Walgreens Boots Alliance is expected to generate 3.58 times more return on investment than MBGGR. However, Walgreens Boots is 3.58 times more volatile than MBGGR 145 02 MAR 26. It trades about 0.07 of its potential returns per unit of risk. MBGGR 145 02 MAR 26 is currently generating about -0.16 per unit of risk. If you would invest  831.00  in Walgreens Boots Alliance on September 23, 2024 and sell it today you would earn a total of  124.00  from holding Walgreens Boots Alliance or generate 14.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	58.46%
Values	Daily Returns

Walgreens Boots Alliance  vs.  MBGGR 145 02 MAR 26

Walgreens Boots Alliance

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Walgreens Boots Alliance are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Walgreens Boots sustained solid returns over the last few months and may actually be approaching a breakup point.

MBGGR 145 02

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MBGGR 145 02 MAR 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for MBGGR 145 02 MAR 26 investors.

Pair Trading with Walgreens Boots and MBGGR

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

The idea behind Walgreens Boots Alliance and MBGGR 145 02 MAR 26 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.