Correlation Between CVS Health and Uniper SE
Can any of the company-specific risk be diversified away by investing in both CVS Health and Uniper SE 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 CVS Health and Uniper SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS Health Corp and Uniper SE, you can compare the effects of market volatilities on CVS Health and Uniper SE 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 CVS Health with a short position of Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Uniper SE.
Diversification Opportunities for CVS Health and Uniper SE
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CVS and Uniper is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE and CVS Health 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 CVS Health Corp are associated (or correlated) with Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of CVS Health i.e., CVS Health and Uniper SE go up and down completely randomly.
Pair Corralation between CVS Health and Uniper SE
Assuming the 90 days trading horizon CVS Health Corp is expected to generate 1.02 times more return on investment than Uniper SE. However, CVS Health is 1.02 times more volatile than Uniper SE. It trades about 0.39 of its potential returns per unit of risk. Uniper SE is currently generating about 0.31 per unit of risk. If you would invest 4,503 in CVS Health Corp on October 26, 2024 and sell it today you would earn a total of 859.00 from holding CVS Health Corp or generate 19.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
CVS Health Corp vs. Uniper SE
Performance |
| Timeline |
| CVS Health Corp |
| Uniper SE |
CVS Health and Uniper SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and Uniper SE
The main advantage of trading using opposite CVS Health and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, Uniper SE 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 Uniper SE will offset losses from the drop in Uniper SE's long position.| CVS Health vs. Oxford Technology 2 | CVS Health vs. Tatton Asset Management | CVS Health vs. Sunny Optical Technology | CVS Health vs. Summit Materials Cl |
| Uniper SE vs. Batm Advanced Communications | Uniper SE vs. Gamma Communications PLC | Uniper SE vs. Spirent Communications plc | Uniper SE vs. Ecclesiastical Insurance Office |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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