Correlation Between SALTX TECHNOLOGY and CVS Health
Can any of the company-specific risk be diversified away by investing in both SALTX TECHNOLOGY 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 SALTX TECHNOLOGY and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SALTX TECHNOLOGY HLDG and CVS Health, you can compare the effects of market volatilities on SALTX TECHNOLOGY 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 SALTX TECHNOLOGY with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of SALTX TECHNOLOGY and CVS Health.
Diversification Opportunities for SALTX TECHNOLOGY and CVS Health
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between SALTX and CVS is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SALTX TECHNOLOGY HLDG and CVS Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health and SALTX TECHNOLOGY 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 SALTX TECHNOLOGY HLDG 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 SALTX TECHNOLOGY i.e., SALTX TECHNOLOGY and CVS Health go up and down completely randomly.
Pair Corralation between SALTX TECHNOLOGY and CVS Health
Assuming the 90 days horizon SALTX TECHNOLOGY is expected to generate 1.07 times less return on investment than CVS Health. In addition to that, SALTX TECHNOLOGY is 1.53 times more volatile than CVS Health. It trades about 0.15 of its total potential returns per unit of risk. CVS Health is currently generating about 0.25 per unit of volatility. If you would invest 4,436 in CVS Health on October 17, 2024 and sell it today you would earn a total of 560.00 from holding CVS Health or generate 12.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SALTX TECHNOLOGY HLDG vs. CVS Health
Performance |
| Timeline |
| SALTX TECHNOLOGY HLDG |
| CVS Health |
SALTX TECHNOLOGY and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SALTX TECHNOLOGY and CVS Health
The main advantage of trading using opposite SALTX TECHNOLOGY and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SALTX TECHNOLOGY 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.| SALTX TECHNOLOGY vs. CVS Health | SALTX TECHNOLOGY vs. Firan Technology Group | SALTX TECHNOLOGY vs. FEMALE HEALTH | SALTX TECHNOLOGY vs. HEALTHSTREAM |
| CVS Health vs. Nippon Light Metal | CVS Health vs. OPERA SOFTWARE | CVS Health vs. Easy Software AG | CVS Health vs. Magic Software Enterprises |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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