Correlation Between CVS Group and Musti Group
Can any of the company-specific risk be diversified away by investing in both CVS Group and Musti 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 CVS Group and Musti Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS Group plc and Musti Group Oyj, you can compare the effects of market volatilities on CVS Group and Musti 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 CVS Group with a short position of Musti Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Group and Musti Group.
Diversification Opportunities for CVS Group and Musti Group
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CVS and Musti is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding CVS Group plc and Musti Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Musti Group Oyj and CVS 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 CVS Group plc are associated (or correlated) with Musti Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Musti Group Oyj has no effect on the direction of CVS Group i.e., CVS Group and Musti Group go up and down completely randomly.
Pair Corralation between CVS Group and Musti Group
Assuming the 90 days horizon CVS Group plc is expected to generate 1.77 times more return on investment than Musti Group. However, CVS Group is 1.77 times more volatile than Musti Group Oyj. It trades about 0.07 of its potential returns per unit of risk. Musti Group Oyj is currently generating about -0.23 per unit of risk. If you would invest 1,020 in CVS Group plc on September 12, 2024 and sell it today you would earn a total of 40.00 from holding CVS Group plc or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVS Group plc vs. Musti Group Oyj
Performance |
| Timeline |
| CVS Group plc |
| Musti Group Oyj |
CVS Group and Musti Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Group and Musti Group
The main advantage of trading using opposite CVS Group and Musti Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Group position performs unexpectedly, Musti 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 Musti Group will offset losses from the drop in Musti Group's long position.| CVS Group vs. MGIC INVESTMENT | CVS Group vs. PLAYSTUDIOS A DL 0001 | CVS Group vs. Flutter Entertainment PLC | CVS Group vs. CNVISION MEDIA |
| Musti Group vs. ON SEMICONDUCTOR | Musti Group vs. Fidelity National Information | Musti Group vs. National Storage Affiliates | Musti Group vs. INFORMATION SVC GRP |
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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