Correlation Between Harmony Gold and Walgreens Boots

Can any of the company-specific risk be diversified away by investing in both Harmony Gold 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 Harmony Gold and Walgreens Boots into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Harmony Gold Mining and Walgreens Boots Alliance,, you can compare the effects of market volatilities on Harmony Gold 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 Harmony Gold with a short position of Walgreens Boots. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harmony Gold and Walgreens Boots.

Diversification Opportunities for Harmony Gold and Walgreens Boots

0.2

Correlation Coefficient

Harmony Gold  Walgreens Boots

Modest diversification

The 3 months correlation between Harmony and Walgreens is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Harmony Gold Mining 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 Harmony Gold 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 Harmony Gold Mining 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 Harmony Gold i.e., Harmony Gold and Walgreens Boots go up and down completely randomly.

Pair Corralation between Harmony Gold and Walgreens Boots

Assuming the 90 days trading horizon Harmony Gold is expected to generate 2.63 times less return on investment than Walgreens Boots. In addition to that, Harmony Gold is 2.9 times more volatile than Walgreens Boots Alliance,. It trades about 0.03 of its total potential returns per unit of risk. Walgreens Boots Alliance, is currently generating about 0.19 per unit of volatility. If you would invest  433,500  in Walgreens Boots Alliance, on April 23, 2025 and sell it today you would earn a total of  58,000  from holding Walgreens Boots Alliance, or generate 13.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Harmony Gold Mining  vs.  Walgreens Boots Alliance,

Harmony Gold Mining

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Harmony Gold Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Harmony Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Walgreens Boots Alliance,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walgreens Boots Alliance, are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Walgreens Boots sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harmony Gold and Walgreens Boots

The main advantage of trading using opposite Harmony Gold and Walgreens Boots positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harmony Gold 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.

The idea behind Harmony Gold Mining and Walgreens Boots Alliance, 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.