Correlation Between CVS Health and Glaukos Corp
Can any of the company-specific risk be diversified away by investing in both CVS Health and Glaukos Corp 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 Glaukos Corp 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 Glaukos Corp, you can compare the effects of market volatilities on CVS Health and Glaukos Corp 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 Glaukos Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Glaukos Corp.
Diversification Opportunities for CVS Health and Glaukos Corp
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVS and Glaukos is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp and Glaukos Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glaukos Corp 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 Glaukos Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glaukos Corp has no effect on the direction of CVS Health i.e., CVS Health and Glaukos Corp go up and down completely randomly.
Pair Corralation between CVS Health and Glaukos Corp
Considering the 90-day investment horizon CVS Health Corp is expected to under-perform the Glaukos Corp. But the stock apears to be less risky and, when comparing its historical volatility, CVS Health Corp is 1.33 times less risky than Glaukos Corp. The stock trades about -0.04 of its potential returns per unit of risk. The Glaukos Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,527 in Glaukos Corp on August 28, 2024 and sell it today you would earn a total of 9,767 from holding Glaukos Corp or generate 215.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVS Health Corp vs. Glaukos Corp
Performance |
| Timeline |
| CVS Health Corp |
| Glaukos Corp |
CVS Health and Glaukos Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and Glaukos Corp
The main advantage of trading using opposite CVS Health and Glaukos Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, Glaukos Corp 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 Glaukos Corp will offset losses from the drop in Glaukos Corp's long position.| CVS Health vs. Humana Inc | CVS Health vs. Cigna Corp | CVS Health vs. Elevance Health | CVS Health vs. Centene Corp |
| Glaukos Corp vs. Orthopediatrics Corp | Glaukos Corp vs. CONMED | Glaukos Corp vs. LivaNova PLC | Glaukos Corp vs. Paragon 28 |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |