Correlation Between CVS Health and Nexalin Technology
Can any of the company-specific risk be diversified away by investing in both CVS Health and Nexalin Technology 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 Nexalin Technology 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 Nexalin Technology, you can compare the effects of market volatilities on CVS Health and Nexalin Technology 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 Nexalin Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Nexalin Technology.
Diversification Opportunities for CVS Health and Nexalin Technology
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVS and Nexalin is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp and Nexalin Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexalin Technology 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 Nexalin Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexalin Technology has no effect on the direction of CVS Health i.e., CVS Health and Nexalin Technology go up and down completely randomly.
Pair Corralation between CVS Health and Nexalin Technology
Considering the 90-day investment horizon CVS Health Corp is expected to under-perform the Nexalin Technology. But the stock apears to be less risky and, when comparing its historical volatility, CVS Health Corp is 63.29 times less risky than Nexalin Technology. The stock trades about 0.0 of its potential returns per unit of risk. The Nexalin Technology is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 9.97 in Nexalin Technology on August 31, 2024 and sell it today you would earn a total of 31.03 from holding Nexalin Technology or generate 311.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 59.9% |
| Values | Daily Returns |
CVS Health Corp vs. Nexalin Technology
Performance |
| Timeline |
| CVS Health Corp |
| Nexalin Technology |
CVS Health and Nexalin Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and Nexalin Technology
The main advantage of trading using opposite CVS Health and Nexalin Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, Nexalin Technology 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 Nexalin Technology will offset losses from the drop in Nexalin Technology's long position.| CVS Health vs. Humana Inc | CVS Health vs. Cigna Corp | CVS Health vs. Elevance Health | CVS Health vs. Centene Corp |
| Nexalin Technology vs. NexGel Warrant | Nexalin Technology vs. NLS Pharmaceutics AG | Nexalin Technology vs. Inspira Technologies Oxy |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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