Correlation Between Host Hotels and CVS Health
Can any of the company-specific risk be diversified away by investing in both Host Hotels and CVS Health 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 Host Hotels and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Host Hotels Resorts and CVS Health Corp, you can compare the effects of market volatilities on Host Hotels and CVS Health 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 Host Hotels with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and CVS Health.
Diversification Opportunities for Host Hotels and CVS Health
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Host and CVS is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and CVS Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health Corp and Host Hotels 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 Host Hotels Resorts are associated (or correlated) with CVS Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS Health Corp has no effect on the direction of Host Hotels i.e., Host Hotels and CVS Health go up and down completely randomly.
Pair Corralation between Host Hotels and CVS Health
Assuming the 90 days trading horizon Host Hotels Resorts is expected to under-perform the CVS Health. But the stock apears to be less risky and, when comparing its historical volatility, Host Hotels Resorts is 2.79 times less risky than CVS Health. The stock trades about -0.02 of its potential returns per unit of risk. The CVS Health Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,610 in CVS Health Corp on December 4, 2024 and sell it today you would earn a total of 916.00 from holding CVS Health Corp or generate 16.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. CVS Health Corp
Performance |
| Timeline |
| Host Hotels Resorts |
| CVS Health Corp |
Host Hotels and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and CVS Health
The main advantage of trading using opposite Host Hotels and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, CVS Health 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 CVS Health will offset losses from the drop in CVS Health's long position.| Host Hotels vs. Evolution Gaming Group | ||
| Host Hotels vs. Lowland Investment Co | ||
| Host Hotels vs. mobilezone holding AG | ||
| Host Hotels vs. Fonix Mobile plc |
| CVS Health vs. Molson Coors Beverage | ||
| CVS Health vs. Naked Wines plc | ||
| CVS Health vs. Universal Music Group | ||
| CVS Health vs. Orascom Investment Holding |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |