Correlation Between Air Lease and CVS Health
Can any of the company-specific risk be diversified away by investing in both Air Lease 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 Air Lease and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and CVS Health, you can compare the effects of market volatilities on Air Lease 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 Air Lease with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and CVS Health.
Diversification Opportunities for Air Lease and CVS Health
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and CVS is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and CVS Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health and Air Lease 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 Air Lease 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 Air Lease i.e., Air Lease and CVS Health go up and down completely randomly.
Pair Corralation between Air Lease and CVS Health
Assuming the 90 days trading horizon Air Lease is expected to generate 6.36 times less return on investment than CVS Health. But when comparing it to its historical volatility, Air Lease is 1.37 times less risky than CVS Health. It trades about 0.01 of its potential returns per unit of risk. CVS Health is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,995 in CVS Health on January 7, 2025 and sell it today you would earn a total of 919.00 from holding CVS Health or generate 18.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.32% |
| Values | Daily Returns |
Air Lease vs. CVS Health
Performance |
| Timeline |
| Air Lease |
| CVS Health |
Air Lease and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and CVS Health
The main advantage of trading using opposite Air Lease and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease 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.| Air Lease vs. CITIC Telecom International | Air Lease vs. Sunny Optical Technology | Air Lease vs. VELA TECHNOLPLC LS 0001 | Air Lease vs. AAC TECHNOLOGHLDGADR |
| CVS Health vs. Chengdu PUTIAN Telecommunications | CVS Health vs. MAVEN WIRELESS SWEDEN | CVS Health vs. Infrastrutture Wireless Italiane | CVS Health vs. Cass Information Systems |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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