Correlation Between Walgreens Boots and Harvest Fund

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

Diversification Opportunities for Walgreens Boots and Harvest Fund

0.48

Correlation Coefficient

Walgreens Boots  Harvest Fund

Very weak diversification

The 3 months correlation between Walgreens and Harvest is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Harvest Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Fund Management 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 Harvest Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Fund Management has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Harvest Fund go up and down completely randomly.

Pair Corralation between Walgreens Boots and Harvest Fund

Considering the 90-day investment horizon Walgreens Boots is expected to generate 1.25 times less return on investment than Harvest Fund. In addition to that, Walgreens Boots is 3.73 times more volatile than Harvest Fund Management. It trades about 0.07 of its total potential returns per unit of risk. Harvest Fund Management is currently generating about 0.32 per unit of volatility. If you would invest  274.00  in Harvest Fund Management on December 26, 2024 and sell it today you would earn a total of  77.00  from holding Harvest Fund Management or generate 28.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Walgreens Boots Alliance  vs.  Harvest Fund Management

Walgreens Boots Alliance

Risk-Adjusted Performance

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 uncertain fundamental drivers, Walgreens Boots sustained solid returns over the last few months and may actually be approaching a breakup point.

Harvest Fund Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Harvest Fund Management are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Harvest Fund sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Walgreens Boots and Harvest Fund

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

The idea behind Walgreens Boots Alliance and Harvest Fund Management 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.