Correlation Between CVS Health and CONMED
Can any of the company-specific risk be diversified away by investing in both CVS Health and CONMED 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 CONMED into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS Health Corp and CONMED, you can compare the effects of market volatilities on CVS Health and CONMED 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 CONMED. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and CONMED.
Diversification Opportunities for CVS Health and CONMED
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CVS and CONMED is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp and CONMED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONMED 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 Corp are associated (or correlated) with CONMED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONMED has no effect on the direction of CVS Health i.e., CVS Health and CONMED go up and down completely randomly.
Pair Corralation between CVS Health and CONMED
Considering the 90-day investment horizon CVS Health is expected to generate 7.01 times less return on investment than CONMED. In addition to that, CVS Health is 1.43 times more volatile than CONMED. It trades about 0.03 of its total potential returns per unit of risk. CONMED is currently generating about 0.32 per unit of volatility. If you would invest 6,376 in CONMED on August 27, 2024 and sell it today you would earn a total of 1,115 from holding CONMED or generate 17.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVS Health Corp vs. CONMED
Performance |
| Timeline |
| CVS Health Corp |
| CONMED |
CVS Health and CONMED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and CONMED
The main advantage of trading using opposite CVS Health and CONMED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, CONMED 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 CONMED will offset losses from the drop in CONMED's long position.| CVS Health vs. Humana Inc | CVS Health vs. Cigna Corp | CVS Health vs. Elevance Health | CVS Health vs. Centene Corp |
| CONMED vs. Heartbeam | CONMED vs. EUDA Health Holdings | CONMED vs. Nutex Health | CONMED vs. Healthcare Triangle |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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