Correlation Between AMG Advanced and CVS Health
Can any of the company-specific risk be diversified away by investing in both AMG Advanced 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 AMG Advanced and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and CVS Health Corp, you can compare the effects of market volatilities on AMG Advanced 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 AMG Advanced with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and CVS Health.
Diversification Opportunities for AMG Advanced and CVS Health
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AMG and CVS is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical 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 AMG Advanced 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 AMG Advanced Metallurgical 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 AMG Advanced i.e., AMG Advanced and CVS Health go up and down completely randomly.
Pair Corralation between AMG Advanced and CVS Health
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the CVS Health. In addition to that, AMG Advanced is 1.16 times more volatile than CVS Health Corp. It trades about -0.08 of its total potential returns per unit of risk. CVS Health Corp is currently generating about -0.01 per unit of volatility. If you would invest 6,383 in CVS Health Corp on September 12, 2024 and sell it today you would lose (859.00) from holding CVS Health Corp or give up 13.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. CVS Health Corp
Performance |
| Timeline |
| AMG Advanced Metallu |
| CVS Health Corp |
AMG Advanced and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and CVS Health
The main advantage of trading using opposite AMG Advanced and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced 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.| AMG Advanced vs. Neometals | AMG Advanced vs. Bisichi Mining PLC | AMG Advanced vs. Playtech Plc | AMG Advanced vs. Metals Exploration Plc |
| CVS Health vs. XLMedia PLC | CVS Health vs. Grieg Seafood | CVS Health vs. Edita Food Industries | CVS Health vs. Gear4music Plc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |