Correlation Between CVS HEALTH and Jinhua Capital
Can any of the company-specific risk be diversified away by investing in both CVS HEALTH and Jinhua Capital 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 Jinhua Capital 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 Jinhua Capital, you can compare the effects of market volatilities on CVS HEALTH and Jinhua Capital 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 Jinhua Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS HEALTH and Jinhua Capital.
Diversification Opportunities for CVS HEALTH and Jinhua Capital
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CVS and Jinhua is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding CVS HEALTH CDR and Jinhua Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhua Capital 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 Jinhua Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhua Capital has no effect on the direction of CVS HEALTH i.e., CVS HEALTH and Jinhua Capital go up and down completely randomly.
Pair Corralation between CVS HEALTH and Jinhua Capital
Assuming the 90 days trading horizon CVS HEALTH is expected to generate 5.51 times less return on investment than Jinhua Capital. But when comparing it to its historical volatility, CVS HEALTH CDR is 6.93 times less risky than Jinhua Capital. It trades about 0.12 of its potential returns per unit of risk. Jinhua Capital is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.50 in Jinhua Capital on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Jinhua Capital or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVS HEALTH CDR vs. Jinhua Capital
Performance |
| Timeline |
| CVS HEALTH CDR |
| Jinhua Capital |
CVS HEALTH and Jinhua Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS HEALTH and Jinhua Capital
The main advantage of trading using opposite CVS HEALTH and Jinhua Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS HEALTH position performs unexpectedly, Jinhua Capital 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 Jinhua Capital will offset losses from the drop in Jinhua Capital's long position.| CVS HEALTH vs. Westaim Corp | CVS HEALTH vs. Pulse Seismic | CVS HEALTH vs. Quarterhill | CVS HEALTH vs. TECSYS Inc |
| Jinhua Capital vs. WELL Health Technologies | Jinhua Capital vs. Monument Mining Limited | Jinhua Capital vs. CVS HEALTH CDR | Jinhua Capital vs. UnitedHealth Group CDR |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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