Correlation Between Global X and Walgreens Boots
Can any of the company-specific risk be diversified away by investing in both Global X and Walgreens Boots 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 Global X and Walgreens Boots into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and Walgreens Boots Alliance, you can compare the effects of market volatilities on Global X and Walgreens Boots 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 Global X with a short position of Walgreens Boots. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Walgreens Boots.
Diversification Opportunities for Global X and Walgreens Boots
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Walgreens is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Walgreens Boots Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walgreens Boots Alliance and Global X 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 Global X Funds are associated (or correlated) with Walgreens Boots. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walgreens Boots Alliance has no effect on the direction of Global X i.e., Global X and Walgreens Boots go up and down completely randomly.
Pair Corralation between Global X and Walgreens Boots
Given the investment horizon of 90 days Global X Funds is expected to generate 0.27 times more return on investment than Walgreens Boots. However, Global X Funds is 3.74 times less risky than Walgreens Boots. It trades about -0.13 of its potential returns per unit of risk. Walgreens Boots Alliance is currently generating about -0.2 per unit of risk. If you would invest 3,259 in Global X Funds on January 20, 2024 and sell it today you would lose (75.00) from holding Global X Funds or give up 2.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Funds vs. Walgreens Boots Alliance
Performance |
| Timeline |
| Global X Funds |
| Walgreens Boots Alliance |
Global X and Walgreens Boots Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Walgreens Boots
The main advantage of trading using opposite Global X and Walgreens Boots positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Walgreens Boots 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 Walgreens Boots will offset losses from the drop in Walgreens Boots' long position.| Global X vs. Vanguard Total Stock | Global X vs. SPDR SP 500 | Global X vs. iShares Core SP | Global X vs. Vanguard Total Bond |
| Walgreens Boots vs. PetMed Express | Walgreens Boots vs. Bimi International Medical | Walgreens Boots vs. Fire Flower Holdings | Walgreens Boots vs. GABY Inc |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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