Correlation Between CVS Health and Kelly Services
Can any of the company-specific risk be diversified away by investing in both CVS Health and Kelly Services 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 Kelly Services 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 Kelly Services A, you can compare the effects of market volatilities on CVS Health and Kelly Services 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 Kelly Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Kelly Services.
Diversification Opportunities for CVS Health and Kelly Services
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CVS and Kelly is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp and Kelly Services A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelly Services A 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 Kelly Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelly Services A has no effect on the direction of CVS Health i.e., CVS Health and Kelly Services go up and down completely randomly.
Pair Corralation between CVS Health and Kelly Services
Considering the 90-day investment horizon CVS Health Corp is expected to under-perform the Kelly Services. In addition to that, CVS Health is 1.55 times more volatile than Kelly Services A. It trades about -0.42 of its total potential returns per unit of risk. Kelly Services A is currently generating about -0.13 per unit of volatility. If you would invest 1,409 in Kelly Services A on September 19, 2024 and sell it today you would lose (67.00) from holding Kelly Services A or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVS Health Corp vs. Kelly Services A
Performance |
| Timeline |
| CVS Health Corp |
| Kelly Services A |
CVS Health and Kelly Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and Kelly Services
The main advantage of trading using opposite CVS Health and Kelly Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, Kelly Services 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 Kelly Services will offset losses from the drop in Kelly Services' long position.| CVS Health vs. ASGN Inc | CVS Health vs. Kforce Inc | CVS Health vs. Kelly Services A | CVS Health vs. Central Garden Pet |
| Kelly Services vs. Korn Ferry | Kelly Services vs. Heidrick Struggles International | Kelly Services vs. Hudson Global | Kelly Services vs. ManpowerGroup |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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