Correlation Between CVS HEALTH and Aya Gold
Can any of the company-specific risk be diversified away by investing in both CVS HEALTH and Aya Gold 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 Aya Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS HEALTH CDR and Aya Gold Silver, you can compare the effects of market volatilities on CVS HEALTH and Aya Gold 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 Aya Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS HEALTH and Aya Gold.
Diversification Opportunities for CVS HEALTH and Aya Gold
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CVS and Aya is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding CVS HEALTH CDR and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver 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 CDR are associated (or correlated) with Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of CVS HEALTH i.e., CVS HEALTH and Aya Gold go up and down completely randomly.
Pair Corralation between CVS HEALTH and Aya Gold
Assuming the 90 days trading horizon CVS HEALTH CDR is expected to generate 0.62 times more return on investment than Aya Gold. However, CVS HEALTH CDR is 1.6 times less risky than Aya Gold. It trades about 0.08 of its potential returns per unit of risk. Aya Gold Silver is currently generating about -0.21 per unit of risk. If you would invest 1,409 in CVS HEALTH CDR on September 1, 2024 and sell it today you would earn a total of 69.00 from holding CVS HEALTH CDR or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVS HEALTH CDR vs. Aya Gold Silver
Performance |
| Timeline |
| CVS HEALTH CDR |
| Aya Gold Silver |
CVS HEALTH and Aya Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS HEALTH and Aya Gold
The main advantage of trading using opposite CVS HEALTH and Aya Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS HEALTH position performs unexpectedly, Aya Gold 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 Aya Gold will offset losses from the drop in Aya Gold's long position.| CVS HEALTH vs. Extendicare | CVS HEALTH vs. Sienna Senior Living | CVS HEALTH vs. Chemtrade Logistics Income | CVS HEALTH vs. iShares Canadian HYBrid |
| Aya Gold vs. First Majestic Silver | Aya Gold vs. Ivanhoe Energy | Aya Gold vs. Orezone Gold Corp | Aya Gold vs. Faraday Copper Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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