Correlation Between CVS Health and Nutex Health
Can any of the company-specific risk be diversified away by investing in both CVS Health and Nutex Health 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 Nutex Health 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 Nutex Health, you can compare the effects of market volatilities on CVS Health and Nutex Health 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 Nutex Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Nutex Health.
Diversification Opportunities for CVS Health and Nutex Health
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVS and Nutex is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp and Nutex Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutex Health 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 Nutex Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutex Health has no effect on the direction of CVS Health i.e., CVS Health and Nutex Health go up and down completely randomly.
Pair Corralation between CVS Health and Nutex Health
Considering the 90-day investment horizon CVS Health is expected to generate 11.11 times less return on investment than Nutex Health. But when comparing it to its historical volatility, CVS Health Corp is 2.69 times less risky than Nutex Health. It trades about 0.05 of its potential returns per unit of risk. Nutex Health is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,400 in Nutex Health on August 29, 2024 and sell it today you would earn a total of 1,076 from holding Nutex Health or generate 44.83% 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. Nutex Health
Performance |
| Timeline |
| CVS Health Corp |
| Nutex Health |
CVS Health and Nutex Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and Nutex Health
The main advantage of trading using opposite CVS Health and Nutex Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, Nutex Health 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 Nutex Health will offset losses from the drop in Nutex Health's long position.| CVS Health vs. Humana Inc | CVS Health vs. Cigna Corp | CVS Health vs. Elevance Health | CVS Health vs. Centene Corp |
| Nutex Health vs. FOXO Technologies | Nutex Health vs. Heartbeam | Nutex Health vs. EUDA Health Holdings | Nutex Health vs. Privia Health Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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