Correlation Between Walgreens Boots and Hawesko Holding

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

Diversification Opportunities for Walgreens Boots and Hawesko Holding

0.11

Correlation Coefficient

Walgreens Boots  Hawesko Holding

Average diversification

The 3 months correlation between Walgreens and Hawesko is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and Hawesko Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawesko Holding AG 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 Hawesko Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawesko Holding AG has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and Hawesko Holding go up and down completely randomly.

Pair Corralation between Walgreens Boots and Hawesko Holding

Considering the 90-day investment horizon Walgreens Boots Alliance is expected to under-perform the Hawesko Holding. In addition to that, Walgreens Boots is 1.59 times more volatile than Hawesko Holding AG. It trades about -0.01 of its total potential returns per unit of risk. Hawesko Holding AG is currently generating about 0.02 per unit of volatility. If you would invest  2,720  in Hawesko Holding AG on September 27, 2024 and sell it today you would earn a total of  50.00  from holding Hawesko Holding AG or generate 1.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Walgreens Boots Alliance  vs.  Hawesko Holding AG

Walgreens Boots Alliance

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Walgreens Boots Alliance are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Walgreens Boots sustained solid returns over the last few months and may actually be approaching a breakup point.

Hawesko Holding AG

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hawesko Holding AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hawesko Holding may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Walgreens Boots and Hawesko Holding

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

The idea behind Walgreens Boots Alliance and Hawesko Holding AG 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .