Correlation Between Canadian General and CVS HEALTH
Can any of the company-specific risk be diversified away by investing in both Canadian General 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 Canadian General and CVS HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian General Investments and CVS HEALTH CDR, you can compare the effects of market volatilities on Canadian General 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 Canadian General with a short position of CVS HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and CVS HEALTH.
Diversification Opportunities for Canadian General and CVS HEALTH
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canadian and CVS is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and CVS HEALTH CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS HEALTH CDR and Canadian General 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 Canadian General Investments 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 CDR has no effect on the direction of Canadian General i.e., Canadian General and CVS HEALTH go up and down completely randomly.
Pair Corralation between Canadian General and CVS HEALTH
Assuming the 90 days trading horizon Canadian General Investments is expected to generate 0.3 times more return on investment than CVS HEALTH. However, Canadian General Investments is 3.29 times less risky than CVS HEALTH. It trades about -0.01 of its potential returns per unit of risk. CVS HEALTH CDR is currently generating about -0.18 per unit of risk. If you would invest 4,153 in Canadian General Investments on October 12, 2024 and sell it today you would lose (12.00) from holding Canadian General Investments or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian General Investments vs. CVS HEALTH CDR
Performance |
| Timeline |
| Canadian General Inv |
| CVS HEALTH CDR |
Canadian General and CVS HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and CVS HEALTH
The main advantage of trading using opposite Canadian General and CVS HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General 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.| Canadian General vs. Uniteds Limited | Canadian General vs. Economic Investment Trust | Canadian General vs. abrdn Asia Pacific | Canadian General vs. Clairvest Group |
| CVS HEALTH vs. Canso Select Opportunities | CVS HEALTH vs. Vizsla Silver Corp | CVS HEALTH vs. Maple Peak Investments | CVS HEALTH vs. CVW CleanTech |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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