Correlation Between CVS Health and TMBThanachart Bank
Can any of the company-specific risk be diversified away by investing in both CVS Health and TMBThanachart Bank 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 TMBThanachart Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS Health and TMBThanachart Bank Public, you can compare the effects of market volatilities on CVS Health and TMBThanachart Bank 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 TMBThanachart Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and TMBThanachart Bank.
Diversification Opportunities for CVS Health and TMBThanachart Bank
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between CVS and TMBThanachart is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health and TMBThanachart Bank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMBThanachart Bank Public 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 TMBThanachart Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMBThanachart Bank Public has no effect on the direction of CVS Health i.e., CVS Health and TMBThanachart Bank go up and down completely randomly.
Pair Corralation between CVS Health and TMBThanachart Bank
Assuming the 90 days trading horizon CVS Health is expected to generate 2.49 times more return on investment than TMBThanachart Bank. However, CVS Health is 2.49 times more volatile than TMBThanachart Bank Public. It trades about 0.02 of its potential returns per unit of risk. TMBThanachart Bank Public is currently generating about -0.16 per unit of risk. If you would invest 5,639 in CVS Health on September 3, 2024 and sell it today you would earn a total of 16.00 from holding CVS Health or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVS Health vs. TMBThanachart Bank Public
Performance |
| Timeline |
| CVS Health |
| TMBThanachart Bank Public |
CVS Health and TMBThanachart Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and TMBThanachart Bank
The main advantage of trading using opposite CVS Health and TMBThanachart Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, TMBThanachart Bank 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 TMBThanachart Bank will offset losses from the drop in TMBThanachart Bank's long position.| CVS Health vs. GFL ENVIRONM | CVS Health vs. Reliance Steel Aluminum | CVS Health vs. Chunghwa Telecom Co | CVS Health vs. BlueScope Steel Limited |
| TMBThanachart Bank vs. CVS Health | TMBThanachart Bank vs. EPSILON HEALTHCARE LTD | TMBThanachart Bank vs. Liberty Broadband | TMBThanachart Bank vs. Gold Road Resources |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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