Correlation Between Walgreens Boots and Vipshop Holdings
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and Vipshop Holdings 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 Vipshop Holdings 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 Vipshop Holdings Limited, you can compare the effects of market volatilities on Walgreens Boots and Vipshop Holdings 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 Vipshop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and Vipshop Holdings.
Diversification Opportunities for Walgreens Boots and Vipshop Holdings
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walgreens and Vipshop is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Vipshop Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings 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 Vipshop Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vipshop Holdings has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Vipshop Holdings go up and down completely randomly.
Pair Corralation between Walgreens Boots and Vipshop Holdings
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to under-perform the Vipshop Holdings. In addition to that, Walgreens Boots is 1.37 times more volatile than Vipshop Holdings Limited. It trades about -0.18 of its total potential returns per unit of risk. Vipshop Holdings Limited is currently generating about -0.12 per unit of volatility. If you would invest 1,660 in Vipshop Holdings Limited on January 23, 2024 and sell it today you would lose (100.00) from holding Vipshop Holdings Limited or give up 6.02% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Walgreens Boots Alliance vs. Vipshop Holdings Limited
Performance |
Timeline |
Walgreens Boots Alliance |
Vipshop Holdings |
Walgreens Boots and Vipshop Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walgreens Boots and Vipshop Holdings
The main advantage of trading using opposite Walgreens Boots and Vipshop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, Vipshop Holdings 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 Vipshop Holdings will offset losses from the drop in Vipshop Holdings' long position.Walgreens Boots vs. Green Cures Botanical | Walgreens Boots vs. Vapor Group | Walgreens Boots vs. Ubiquitech Software | Walgreens Boots vs. OWC Pharmaceutical Research |
Vipshop Holdings vs. Appian Corp | Vipshop Holdings vs. Okta Inc | Vipshop Holdings vs. MongoDB | Vipshop Holdings vs. Twilio 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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