Correlation Between CVS Health and Healthpeak Properties
Can any of the company-specific risk be diversified away by investing in both CVS Health and Healthpeak Properties 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 Healthpeak Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS Health and Healthpeak Properties, you can compare the effects of market volatilities on CVS Health and Healthpeak Properties 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 Healthpeak Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Healthpeak Properties.
Diversification Opportunities for CVS Health and Healthpeak Properties
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between CVS and Healthpeak is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health and Healthpeak Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthpeak Properties 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 Healthpeak Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthpeak Properties has no effect on the direction of CVS Health i.e., CVS Health and Healthpeak Properties go up and down completely randomly.
Pair Corralation between CVS Health and Healthpeak Properties
Assuming the 90 days trading horizon CVS Health is expected to generate 1.16 times more return on investment than Healthpeak Properties. However, CVS Health is 1.16 times more volatile than Healthpeak Properties. It trades about -0.17 of its potential returns per unit of risk. Healthpeak Properties is currently generating about -0.32 per unit of risk. If you would invest 3,126 in CVS Health on October 12, 2024 and sell it today you would lose (286.00) from holding CVS Health or give up 9.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVS Health vs. Healthpeak Properties
Performance |
| Timeline |
| CVS Health |
| Healthpeak Properties |
CVS Health and Healthpeak Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and Healthpeak Properties
The main advantage of trading using opposite CVS Health and Healthpeak Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, Healthpeak Properties 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 Healthpeak Properties will offset losses from the drop in Healthpeak Properties' long position.| CVS Health vs. Palantir Technologies | CVS Health vs. Zebra Technologies | CVS Health vs. Trane Technologies plc | CVS Health vs. Tyler Technologies, |
| Healthpeak Properties vs. Multilaser Industrial SA | Healthpeak Properties vs. DENTSPLY SIRONA | Healthpeak Properties vs. Metalrgica Riosulense SA | Healthpeak Properties vs. METISA Metalrgica Timboense |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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