Correlation Between Dollar General and Walgreens Boots
Can any of the company-specific risk be diversified away by investing in both Dollar General 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 Dollar General and Walgreens Boots into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dollar General and Walgreens Boots Alliance, you can compare the effects of market volatilities on Dollar General 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 Dollar General with a short position of Walgreens Boots. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar General and Walgreens Boots.
Diversification Opportunities for Dollar General and Walgreens Boots
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dollar and Walgreens is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dollar General 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 Dollar General 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 Dollar General 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 Dollar General i.e., Dollar General and Walgreens Boots go up and down completely randomly.
Pair Corralation between Dollar General and Walgreens Boots
Allowing for the 90-day total investment horizon Dollar General is expected to under-perform the Walgreens Boots. But the stock apears to be less risky and, when comparing its historical volatility, Dollar General is 1.43 times less risky than Walgreens Boots. The stock trades about -0.33 of its potential returns per unit of risk. The Walgreens Boots Alliance is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest 1,954 in Walgreens Boots Alliance on January 30, 2024 and sell it today you would lose (184.00) from holding Walgreens Boots Alliance or give up 9.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dollar General vs. Walgreens Boots Alliance
Performance |
Timeline |
Dollar General |
Walgreens Boots Alliance |
Dollar General and Walgreens Boots Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dollar General and Walgreens Boots
The main advantage of trading using opposite Dollar General and Walgreens Boots positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar General 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.Dollar General vs. BJs Wholesale Club | Dollar General vs. Big Lots | Dollar General vs. Costco Wholesale Corp | Dollar General vs. Walmart |
Walgreens Boots vs. PetMed Express | Walgreens Boots vs. Bimi International Medical | Walgreens Boots vs. Leafly Holdings | Walgreens Boots vs. Fire Flower Holdings |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Transaction History View history of all your transactions and understand their impact on performance | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Money Managers Screen money managers from public funds and ETFs managed around the world |