Correlation Between CVS HEALTH and Osisko Metals
Can any of the company-specific risk be diversified away by investing in both CVS HEALTH and Osisko Metals 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 Osisko Metals 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 Osisko Metals, you can compare the effects of market volatilities on CVS HEALTH and Osisko Metals 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 Osisko Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS HEALTH and Osisko Metals.
Diversification Opportunities for CVS HEALTH and Osisko Metals
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between CVS and Osisko is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding CVS HEALTH CDR and Osisko Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Metals 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 Osisko Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Metals has no effect on the direction of CVS HEALTH i.e., CVS HEALTH and Osisko Metals go up and down completely randomly.
Pair Corralation between CVS HEALTH and Osisko Metals
Assuming the 90 days trading horizon CVS HEALTH CDR is expected to under-perform the Osisko Metals. But the stock apears to be less risky and, when comparing its historical volatility, CVS HEALTH CDR is 2.2 times less risky than Osisko Metals. The stock trades about -0.02 of its potential returns per unit of risk. The Osisko Metals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Osisko Metals on September 4, 2024 and sell it today you would earn a total of 8.00 from holding Osisko Metals or generate 47.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
CVS HEALTH CDR vs. Osisko Metals
Performance |
| Timeline |
| CVS HEALTH CDR |
| Osisko Metals |
CVS HEALTH and Osisko Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS HEALTH and Osisko Metals
The main advantage of trading using opposite CVS HEALTH and Osisko Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS HEALTH position performs unexpectedly, Osisko Metals 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 Osisko Metals will offset losses from the drop in Osisko Metals' long position.| CVS HEALTH vs. iShares Canadian HYBrid | CVS HEALTH vs. Altagas Cum Red | CVS HEALTH vs. European Residential Real | CVS HEALTH vs. iShares Fundamental Hedged |
| Osisko Metals vs. First Majestic Silver | Osisko Metals vs. Ivanhoe Energy | Osisko Metals vs. Orezone Gold Corp | Osisko Metals 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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