Correlation Between Beyond Meat and CVS Health
Can any of the company-specific risk be diversified away by investing in both Beyond Meat 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 Beyond Meat and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Meat and CVS Health, you can compare the effects of market volatilities on Beyond Meat 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 Beyond Meat with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and CVS Health.
Diversification Opportunities for Beyond Meat and CVS Health
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Beyond and CVS is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat and CVS Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health and Beyond Meat 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 Beyond Meat 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 Beyond Meat i.e., Beyond Meat and CVS Health go up and down completely randomly.
Pair Corralation between Beyond Meat and CVS Health
Assuming the 90 days trading horizon Beyond Meat is expected to under-perform the CVS Health. But the stock apears to be less risky and, when comparing its historical volatility, Beyond Meat is 1.34 times less risky than CVS Health. The stock trades about -0.13 of its potential returns per unit of risk. The CVS Health is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,119 in CVS Health on November 18, 2024 and sell it today you would earn a total of 525.00 from holding CVS Health or generate 16.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Beyond Meat vs. CVS Health
Performance |
| Timeline |
| Beyond Meat |
| CVS Health |
Beyond Meat and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Meat and CVS Health
The main advantage of trading using opposite Beyond Meat and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat 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.| Beyond Meat vs. LPL Financial Holdings | Beyond Meat vs. Nordon Indstrias Metalrgicas | Beyond Meat vs. The Hartford Financial | Beyond Meat vs. Multilaser Industrial SA |
| CVS Health vs. Clover Health Investments, | CVS Health vs. G2D Investments | CVS Health vs. Spotify Technology SA | CVS Health vs. Charter Communications |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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