Correlation Between CVS Health and GALENA MINING
Can any of the company-specific risk be diversified away by investing in both CVS Health and GALENA MINING 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 GALENA MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS Health and GALENA MINING LTD, you can compare the effects of market volatilities on CVS Health and GALENA MINING 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 GALENA MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and GALENA MINING.
Diversification Opportunities for CVS Health and GALENA MINING
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CVS and GALENA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health and GALENA MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GALENA MINING LTD 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 GALENA MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GALENA MINING LTD has no effect on the direction of CVS Health i.e., CVS Health and GALENA MINING go up and down completely randomly.
Pair Corralation between CVS Health and GALENA MINING
Assuming the 90 days trading horizon CVS Health is expected to generate 0.3 times more return on investment than GALENA MINING. However, CVS Health is 3.37 times less risky than GALENA MINING. It trades about -0.03 of its potential returns per unit of risk. GALENA MINING LTD is currently generating about -0.01 per unit of risk. If you would invest 8,686 in CVS Health on September 4, 2024 and sell it today you would lose (3,053) from holding CVS Health or give up 35.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
CVS Health vs. GALENA MINING LTD
Performance |
| Timeline |
| CVS Health |
| GALENA MINING LTD |
CVS Health and GALENA MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and GALENA MINING
The main advantage of trading using opposite CVS Health and GALENA MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, GALENA MINING 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 GALENA MINING will offset losses from the drop in GALENA MINING's long position.| CVS Health vs. TOTAL GABON | CVS Health vs. Walgreens Boots Alliance | CVS Health vs. Peak Resources Limited |
| GALENA MINING vs. CDL INVESTMENT | GALENA MINING vs. SLR Investment Corp | GALENA MINING vs. ECHO INVESTMENT ZY | GALENA MINING vs. SEI INVESTMENTS |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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