Correlation Between CVS Health and Corsair Gaming
Can any of the company-specific risk be diversified away by investing in both CVS Health and Corsair Gaming 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 Health and Corsair Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS Health and Corsair Gaming, you can compare the effects of market volatilities on CVS Health and Corsair Gaming 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 Health with a short position of Corsair Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Corsair Gaming.
Diversification Opportunities for CVS Health and Corsair Gaming
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CVS and Corsair is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health and Corsair Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsair Gaming and CVS Health 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 Health are associated (or correlated) with Corsair Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsair Gaming has no effect on the direction of CVS Health i.e., CVS Health and Corsair Gaming go up and down completely randomly.
Pair Corralation between CVS Health and Corsair Gaming
Assuming the 90 days trading horizon CVS Health is expected to under-perform the Corsair Gaming. But the stock apears to be less risky and, when comparing its historical volatility, CVS Health is 1.69 times less risky than Corsair Gaming. The stock trades about -0.04 of its potential returns per unit of risk. The Corsair Gaming is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 661.00 in Corsair Gaming on September 13, 2024 and sell it today you would earn a total of 109.00 from holding Corsair Gaming or generate 16.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVS Health vs. Corsair Gaming
Performance |
| Timeline |
| CVS Health |
| Corsair Gaming |
CVS Health and Corsair Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and Corsair Gaming
The main advantage of trading using opposite CVS Health and Corsair Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, Corsair Gaming 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 Corsair Gaming will offset losses from the drop in Corsair Gaming's long position.| CVS Health vs. STRAYER EDUCATION | CVS Health vs. LPKF Laser Electronics | CVS Health vs. Renesas Electronics | CVS Health vs. NorAm Drilling AS |
| Corsair Gaming vs. Datalogic SpA | Corsair Gaming vs. Superior Plus Corp | Corsair Gaming vs. SIVERS SEMICONDUCTORS AB | Corsair Gaming vs. NorAm Drilling AS |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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