Correlation Between CVS Health and SOLSTAD OFFSHORE
Can any of the company-specific risk be diversified away by investing in both CVS Health and SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS Health and SOLSTAD OFFSHORE NK, you can compare the effects of market volatilities on CVS Health and SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and SOLSTAD OFFSHORE.
Diversification Opportunities for CVS Health and SOLSTAD OFFSHORE
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between CVS and SOLSTAD is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health and SOLSTAD OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLSTAD OFFSHORE has no effect on the direction of CVS Health i.e., CVS Health and SOLSTAD OFFSHORE go up and down completely randomly.
Pair Corralation between CVS Health and SOLSTAD OFFSHORE
Assuming the 90 days trading horizon CVS Health is expected to generate 1.82 times more return on investment than SOLSTAD OFFSHORE. However, CVS Health is 1.82 times more volatile than SOLSTAD OFFSHORE NK. It trades about 0.13 of its potential returns per unit of risk. SOLSTAD OFFSHORE NK is currently generating about -0.14 per unit of risk. If you would invest 5,497 in CVS Health on November 29, 2024 and sell it today you would earn a total of 552.00 from holding CVS Health or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVS Health vs. SOLSTAD OFFSHORE NK
Performance |
| Timeline |
| CVS Health |
| SOLSTAD OFFSHORE |
CVS Health and SOLSTAD OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and SOLSTAD OFFSHORE
The main advantage of trading using opposite CVS Health and SOLSTAD OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE will offset losses from the drop in SOLSTAD OFFSHORE's long position.| CVS Health vs. Renesas Electronics | CVS Health vs. Altair Engineering | CVS Health vs. QLEANAIR AB SK 50 | CVS Health vs. UMC Electronics Co |
| SOLSTAD OFFSHORE vs. FRACTAL GAMING GROUP | SOLSTAD OFFSHORE vs. BORR DRILLING NEW | SOLSTAD OFFSHORE vs. HANOVER INSURANCE | SOLSTAD OFFSHORE vs. GAMING FAC SA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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