Correlation Between Walgreens Boots and Janus High

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

Diversification Opportunities for Walgreens Boots and Janus High

-0.01

Correlation Coefficient

Walgreens Boots  Janus High

Good diversification

The 3 months correlation between Walgreens and Janus is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Janus High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus High Yield 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 Janus High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus High Yield has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Janus High go up and down completely randomly.

Pair Corralation between Walgreens Boots and Janus High

Considering the 90-day investment horizon Walgreens Boots Alliance is expected to under-perform the Janus High. In addition to that, Walgreens Boots is 19.26 times more volatile than Janus High Yield Fund. It trades about -0.17 of its total potential returns per unit of risk. Janus High Yield Fund is currently generating about -0.32 per unit of volatility. If you would invest  742.00  in Janus High Yield Fund on October 11, 2024 and sell it today you would lose (8.00) from holding Janus High Yield Fund or give up 1.08% 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.  Janus High Yield Fund

Walgreens Boots Alliance

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Walgreens Boots Alliance are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental drivers, Walgreens Boots may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Janus High Yield

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Janus High Yield Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Janus High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Walgreens Boots and Janus High

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

The idea behind Walgreens Boots Alliance and Janus High Yield Fund 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.