Correlation Between CVS HEALTH and Canadian General
Can any of the company-specific risk be diversified away by investing in both CVS HEALTH and Canadian General 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 Canadian General 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 Canadian General Investments, you can compare the effects of market volatilities on CVS HEALTH and Canadian General 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 Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS HEALTH and Canadian General.
Diversification Opportunities for CVS HEALTH and Canadian General
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CVS and Canadian is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding CVS HEALTH CDR and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv 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 Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of CVS HEALTH i.e., CVS HEALTH and Canadian General go up and down completely randomly.
Pair Corralation between CVS HEALTH and Canadian General
Assuming the 90 days trading horizon CVS HEALTH CDR is expected to under-perform the Canadian General. In addition to that, CVS HEALTH is 2.0 times more volatile than Canadian General Investments. It trades about -0.03 of its total potential returns per unit of risk. Canadian General Investments is currently generating about 0.06 per unit of volatility. If you would invest 3,346 in Canadian General Investments on October 12, 2024 and sell it today you would earn a total of 795.00 from holding Canadian General Investments or generate 23.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVS HEALTH CDR vs. Canadian General Investments
Performance |
| Timeline |
| CVS HEALTH CDR |
| Canadian General Inv |
CVS HEALTH and Canadian General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS HEALTH and Canadian General
The main advantage of trading using opposite CVS HEALTH and Canadian General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS HEALTH position performs unexpectedly, Canadian General 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 Canadian General will offset losses from the drop in Canadian General's long position.| CVS HEALTH vs. Canso Select Opportunities | CVS HEALTH vs. Vizsla Silver Corp | CVS HEALTH vs. Maple Peak Investments | CVS HEALTH vs. CVW CleanTech |
| Canadian General vs. Uniteds Limited | Canadian General vs. Economic Investment Trust | Canadian General vs. abrdn Asia Pacific | Canadian General vs. Clairvest Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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