Correlation Between CVS Health and Fundo Investimento
Can any of the company-specific risk be diversified away by investing in both CVS Health and Fundo Investimento 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 Fundo Investimento into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS Health and Fundo Investimento Imobiliario, you can compare the effects of market volatilities on CVS Health and Fundo Investimento 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 Fundo Investimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Fundo Investimento.
Diversification Opportunities for CVS Health and Fundo Investimento
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVS and Fundo is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health and Fundo Investimento Imobiliario in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundo Investimento 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 Fundo Investimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundo Investimento has no effect on the direction of CVS Health i.e., CVS Health and Fundo Investimento go up and down completely randomly.
Pair Corralation between CVS Health and Fundo Investimento
Assuming the 90 days trading horizon CVS Health is expected to under-perform the Fundo Investimento. In addition to that, CVS Health is 1.1 times more volatile than Fundo Investimento Imobiliario. It trades about -0.01 of its total potential returns per unit of risk. Fundo Investimento Imobiliario is currently generating about 0.02 per unit of volatility. If you would invest 7,392 in Fundo Investimento Imobiliario on September 12, 2024 and sell it today you would earn a total of 558.00 from holding Fundo Investimento Imobiliario or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.77% |
| Values | Daily Returns |
CVS Health vs. Fundo Investimento Imobiliario
Performance |
| Timeline |
| CVS Health |
| Fundo Investimento |
CVS Health and Fundo Investimento Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and Fundo Investimento
The main advantage of trading using opposite CVS Health and Fundo Investimento positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, Fundo Investimento 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 Fundo Investimento will offset losses from the drop in Fundo Investimento's long position.| CVS Health vs. Fundo Investimento Imobiliario | CVS Health vs. LESTE FDO INV | CVS Health vs. Fras le SA | CVS Health vs. Western Digital |
| Fundo Investimento vs. JFL Living Fundo | Fundo Investimento vs. Maxi Renda Fundo | Fundo Investimento vs. Ourinvest Jpp Fundo | Fundo Investimento vs. Tordesilhas Ei Fundo |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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