Correlation Between G5 Entertainment and CVS Health
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment 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 G5 Entertainment and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G5 Entertainment AB and CVS Health Corp, you can compare the effects of market volatilities on G5 Entertainment 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 G5 Entertainment with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and CVS Health.
Diversification Opportunities for G5 Entertainment and CVS Health
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 0QUS and CVS is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB 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 G5 Entertainment 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 G5 Entertainment AB 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 G5 Entertainment i.e., G5 Entertainment and CVS Health go up and down completely randomly.
Pair Corralation between G5 Entertainment and CVS Health
Assuming the 90 days trading horizon G5 Entertainment AB is expected to generate 1.01 times more return on investment than CVS Health. However, G5 Entertainment is 1.01 times more volatile than CVS Health Corp. It trades about 0.13 of its potential returns per unit of risk. CVS Health Corp is currently generating about -0.09 per unit of risk. If you would invest 10,920 in G5 Entertainment AB on October 13, 2024 and sell it today you would earn a total of 620.00 from holding G5 Entertainment AB or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
G5 Entertainment AB vs. CVS Health Corp
Performance |
| Timeline |
| G5 Entertainment |
| CVS Health Corp |
G5 Entertainment and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and CVS Health
The main advantage of trading using opposite G5 Entertainment and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment 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.| G5 Entertainment vs. Walmart | G5 Entertainment vs. BYD Co | G5 Entertainment vs. Volkswagen AG | G5 Entertainment vs. Volkswagen AG Non Vtg |
| CVS Health vs. Walmart | CVS Health vs. BYD Co | CVS Health vs. Volkswagen AG | CVS Health vs. Volkswagen AG Non Vtg |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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