Correlation Between CVS Group and Dow Jones
Can any of the company-specific risk be diversified away by investing in both CVS Group and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on CVS Group and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Group and Dow Jones.
Diversification Opportunities for CVS Group and Dow Jones
Pay attention - limited upside
The 3 months correlation between CVS and Dow is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding CVS Group plc and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of CVS Group i.e., CVS Group and Dow Jones go up and down completely randomly.
Pair Corralation between CVS Group and Dow Jones
Assuming the 90 days horizon CVS Group plc is expected to under-perform the Dow Jones. In addition to that, CVS Group is 3.29 times more volatile than Dow Jones Industrial. It trades about -0.05 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.14 per unit of volatility. If you would invest 3,858,916 in Dow Jones Industrial on September 12, 2024 and sell it today you would earn a total of 555,940 from holding Dow Jones Industrial or generate 14.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.66% |
| Values | Daily Returns |
CVS Group plc vs. Dow Jones Industrial
Performance |
| Timeline |
CVS Group and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
CVS Group plc
Pair trading matchups for CVS Group
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with CVS Group and Dow Jones
The main advantage of trading using opposite CVS Group and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Group position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' 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 |
| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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