Correlation Between CVS Health and Zynex
Can any of the company-specific risk be diversified away by investing in both CVS Health and Zynex 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 Zynex 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 Zynex Inc, you can compare the effects of market volatilities on CVS Health and Zynex 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 Zynex. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Zynex.
Diversification Opportunities for CVS Health and Zynex
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVS and Zynex is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp and Zynex Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zynex Inc 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 Zynex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zynex Inc has no effect on the direction of CVS Health i.e., CVS Health and Zynex go up and down completely randomly.
Pair Corralation between CVS Health and Zynex
Considering the 90-day investment horizon CVS Health Corp is expected to generate 0.84 times more return on investment than Zynex. However, CVS Health Corp is 1.18 times less risky than Zynex. It trades about 0.03 of its potential returns per unit of risk. Zynex Inc is currently generating about -0.06 per unit of risk. If you would invest 5,736 in CVS Health Corp on August 27, 2024 and sell it today you would earn a total of 65.00 from holding CVS Health Corp or generate 1.13% 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. Zynex Inc
Performance |
| Timeline |
| CVS Health Corp |
| Zynex Inc |
CVS Health and Zynex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and Zynex
The main advantage of trading using opposite CVS Health and Zynex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, Zynex 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 Zynex will offset losses from the drop in Zynex's long position.| CVS Health vs. Humana Inc | CVS Health vs. Cigna Corp | CVS Health vs. Elevance Health | CVS Health vs. Centene Corp |
| Zynex vs. Heartbeam | Zynex vs. EUDA Health Holdings | Zynex vs. Nutex Health | Zynex 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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