Correlation Between CVS HEALTH and Enbridge Pref
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By analyzing existing cross correlation between CVS HEALTH CDR and Enbridge Pref 5, you can compare the effects of market volatilities on CVS HEALTH and Enbridge Pref 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 Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS HEALTH and Enbridge Pref.
Diversification Opportunities for CVS HEALTH and Enbridge Pref
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVS and Enbridge is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding CVS HEALTH CDR and Enbridge Pref 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref 5 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 Enbridge Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge Pref 5 has no effect on the direction of CVS HEALTH i.e., CVS HEALTH and Enbridge Pref go up and down completely randomly.
Pair Corralation between CVS HEALTH and Enbridge Pref
Assuming the 90 days trading horizon CVS HEALTH CDR is expected to generate 4.3 times more return on investment than Enbridge Pref. However, CVS HEALTH is 4.3 times more volatile than Enbridge Pref 5. It trades about 0.49 of its potential returns per unit of risk. Enbridge Pref 5 is currently generating about 0.2 per unit of risk. If you would invest 1,100 in CVS HEALTH CDR on October 24, 2024 and sell it today you would earn a total of 218.00 from holding CVS HEALTH CDR or generate 19.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
CVS HEALTH CDR vs. Enbridge Pref 5
Performance |
| Timeline |
| CVS HEALTH CDR |
| Enbridge Pref 5 |
CVS HEALTH and Enbridge Pref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS HEALTH and Enbridge Pref
The main advantage of trading using opposite CVS HEALTH and Enbridge Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS HEALTH position performs unexpectedly, Enbridge Pref 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 Enbridge Pref will offset losses from the drop in Enbridge Pref's long position.| CVS HEALTH vs. Ramp Metals | CVS HEALTH vs. Algoma Steel Group | CVS HEALTH vs. Mako Mining Corp | CVS HEALTH vs. Gfl Environmental Holdings |
| Enbridge Pref vs. NeXGold Mining Corp | Enbridge Pref vs. NorthWest Healthcare Properties | Enbridge Pref vs. Arizona Gold Silver | Enbridge Pref vs. Storage Vault Canada |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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