Correlation Between CVS Health and Beyond Meat
Can any of the company-specific risk be diversified away by investing in both CVS Health and Beyond Meat 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 Beyond Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS Health and Beyond Meat, you can compare the effects of market volatilities on CVS Health and Beyond Meat 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 Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Beyond Meat.
Diversification Opportunities for CVS Health and Beyond Meat
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CVS and Beyond is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat 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 are associated (or correlated) with Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of CVS Health i.e., CVS Health and Beyond Meat go up and down completely randomly.
Pair Corralation between CVS Health and Beyond Meat
Assuming the 90 days trading horizon CVS Health is expected to generate 2.6 times less return on investment than Beyond Meat. But when comparing it to its historical volatility, CVS Health is 2.1 times less risky than Beyond Meat. It trades about 0.01 of its potential returns per unit of risk. Beyond Meat is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 165.00 in Beyond Meat on August 24, 2024 and sell it today you would lose (19.00) from holding Beyond Meat or give up 11.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.0% |
| Values | Daily Returns |
CVS Health vs. Beyond Meat
Performance |
| Timeline |
| CVS Health |
| Beyond Meat |
CVS Health and Beyond Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and Beyond Meat
The main advantage of trading using opposite CVS Health and Beyond Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, Beyond Meat 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 Beyond Meat will offset losses from the drop in Beyond Meat's long position.| CVS Health vs. BTG Pactual Logstica | CVS Health vs. Plano Plano Desenvolvimento | CVS Health vs. Companhia Habitasul de | CVS Health vs. The Procter Gamble |
| Beyond Meat vs. JBS SA | Beyond Meat vs. M Dias Branco | Beyond Meat vs. Marfrig Global Foods | Beyond Meat vs. Camil Alimentos SA |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |