Correlation Between Musti Group and CVS Group
Can any of the company-specific risk be diversified away by investing in both Musti Group and CVS Group 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 Musti Group and CVS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Musti Group Oyj and CVS Group plc, you can compare the effects of market volatilities on Musti Group and CVS Group 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 Musti Group with a short position of CVS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Musti Group and CVS Group.
Diversification Opportunities for Musti Group and CVS Group
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Musti and CVS is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Musti Group Oyj and CVS Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Group plc and Musti Group 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 Musti Group Oyj are associated (or correlated) with CVS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS Group plc has no effect on the direction of Musti Group i.e., Musti Group and CVS Group go up and down completely randomly.
Pair Corralation between Musti Group and CVS Group
Assuming the 90 days horizon Musti Group Oyj is expected to generate 0.86 times more return on investment than CVS Group. However, Musti Group Oyj is 1.16 times less risky than CVS Group. It trades about 0.04 of its potential returns per unit of risk. CVS Group plc is currently generating about -0.05 per unit of risk. If you would invest 1,504 in Musti Group Oyj on September 5, 2024 and sell it today you would earn a total of 551.00 from holding Musti Group Oyj or generate 36.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Musti Group Oyj vs. CVS Group plc
Performance |
| Timeline |
| Musti Group Oyj |
| CVS Group plc |
Musti Group and CVS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Musti Group and CVS Group
The main advantage of trading using opposite Musti Group and CVS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Musti Group position performs unexpectedly, CVS Group 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 Group will offset losses from the drop in CVS Group's long position.| Musti Group vs. BOYD GROUP SERVICES | Musti Group vs. Frontdoor | Musti Group vs. CVS Group plc | Musti Group vs. Gesundheitswelt Chiemgau AG |
| CVS Group vs. Ribbon Communications | CVS Group vs. SK TELECOM TDADR | CVS Group vs. Charter Communications | CVS Group vs. Gamma Communications 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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