Correlation Between CVS Health and JSL SA
Can any of the company-specific risk be diversified away by investing in both CVS Health and JSL SA 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 JSL SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS Health and JSL SA, you can compare the effects of market volatilities on CVS Health and JSL SA 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 JSL SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and JSL SA.
Diversification Opportunities for CVS Health and JSL SA
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVS and JSL is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health and JSL SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSL SA 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 JSL SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSL SA has no effect on the direction of CVS Health i.e., CVS Health and JSL SA go up and down completely randomly.
Pair Corralation between CVS Health and JSL SA
Assuming the 90 days trading horizon CVS Health is expected to generate 0.91 times more return on investment than JSL SA. However, CVS Health is 1.1 times less risky than JSL SA. It trades about 0.02 of its potential returns per unit of risk. JSL SA is currently generating about -0.01 per unit of risk. If you would invest 3,296 in CVS Health on September 2, 2024 and sell it today you would earn a total of 316.00 from holding CVS Health or generate 9.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.13% |
| Values | Daily Returns |
CVS Health vs. JSL SA
Performance |
| Timeline |
| CVS Health |
| JSL SA |
CVS Health and JSL SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and JSL SA
The main advantage of trading using opposite CVS Health and JSL SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, JSL SA 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 JSL SA will offset losses from the drop in JSL SA's long position.| CVS Health vs. Fras le SA | CVS Health vs. Western Digital | CVS Health vs. Energisa SA | CVS Health vs. Clave Indices De |
| JSL SA vs. METISA Metalrgica Timboense | JSL SA vs. Lupatech SA | JSL SA vs. Fras le SA | JSL SA vs. Energisa 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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