Correlation Between CVS Health and HF SINCLAIR
Can any of the company-specific risk be diversified away by investing in both CVS Health and HF SINCLAIR 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 HF SINCLAIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS Health and HF SINCLAIR P, you can compare the effects of market volatilities on CVS Health and HF SINCLAIR 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 HF SINCLAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and HF SINCLAIR.
Diversification Opportunities for CVS Health and HF SINCLAIR
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CVS and HL80 is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health and HF SINCLAIR P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF SINCLAIR P 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 HF SINCLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF SINCLAIR P has no effect on the direction of CVS Health i.e., CVS Health and HF SINCLAIR go up and down completely randomly.
Pair Corralation between CVS Health and HF SINCLAIR
Assuming the 90 days trading horizon CVS Health is expected to generate 1.78 times more return on investment than HF SINCLAIR. However, CVS Health is 1.78 times more volatile than HF SINCLAIR P. It trades about -0.04 of its potential returns per unit of risk. HF SINCLAIR P is currently generating about -0.22 per unit of risk. If you would invest 5,117 in CVS Health on September 13, 2024 and sell it today you would lose (135.00) from holding CVS Health or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVS Health vs. HF SINCLAIR P
Performance |
| Timeline |
| CVS Health |
| HF SINCLAIR P |
CVS Health and HF SINCLAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and HF SINCLAIR
The main advantage of trading using opposite CVS Health and HF SINCLAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, HF SINCLAIR 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 HF SINCLAIR will offset losses from the drop in HF SINCLAIR'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 |
| HF SINCLAIR vs. Superior Plus Corp | HF SINCLAIR vs. SIVERS SEMICONDUCTORS AB | HF SINCLAIR vs. Norsk Hydro ASA | HF SINCLAIR vs. Reliance Steel Aluminum |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |