Correlation Between Nib Holdings and CVS Health
Can any of the company-specific risk be diversified away by investing in both Nib Holdings 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 Nib Holdings and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between nib holdings limited and CVS Health, you can compare the effects of market volatilities on Nib Holdings 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 Nib Holdings with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nib Holdings and CVS Health.
Diversification Opportunities for Nib Holdings and CVS Health
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nib and CVS is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding nib holdings limited and CVS Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health and Nib Holdings 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 nib holdings limited 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 has no effect on the direction of Nib Holdings i.e., Nib Holdings and CVS Health go up and down completely randomly.
Pair Corralation between Nib Holdings and CVS Health
Assuming the 90 days horizon nib holdings limited is expected to generate 0.93 times more return on investment than CVS Health. However, nib holdings limited is 1.07 times less risky than CVS Health. It trades about -0.02 of its potential returns per unit of risk. CVS Health is currently generating about -0.04 per unit of risk. If you would invest 423.00 in nib holdings limited on September 14, 2024 and sell it today you would lose (91.00) from holding nib holdings limited or give up 21.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
nib holdings limited vs. CVS Health
Performance |
| Timeline |
| nib holdings limited |
| CVS Health |
Nib Holdings and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nib Holdings and CVS Health
The main advantage of trading using opposite Nib Holdings and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nib Holdings 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.| Nib Holdings vs. CVS Health | Nib Holdings vs. SHIP HEALTHCARE HLDGINC | Nib Holdings vs. EPSILON HEALTHCARE LTD | Nib Holdings vs. ASSOC BR FOODS |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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