Correlation Between CVS Health and CM Hospitalar
Can any of the company-specific risk be diversified away by investing in both CVS Health and CM Hospitalar 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 CM Hospitalar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS Health and CM Hospitalar SA, you can compare the effects of market volatilities on CVS Health and CM Hospitalar 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 CM Hospitalar. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and CM Hospitalar.
Diversification Opportunities for CVS Health and CM Hospitalar
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVS and VVEO3 is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health and CM Hospitalar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CM Hospitalar 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 CM Hospitalar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CM Hospitalar SA has no effect on the direction of CVS Health i.e., CVS Health and CM Hospitalar go up and down completely randomly.
Pair Corralation between CVS Health and CM Hospitalar
Assuming the 90 days trading horizon CVS Health is expected to generate 0.62 times more return on investment than CM Hospitalar. However, CVS Health is 1.62 times less risky than CM Hospitalar. It trades about 0.03 of its potential returns per unit of risk. CM Hospitalar SA is currently generating about 0.01 per unit of risk. If you would invest 3,267 in CVS Health on August 27, 2024 and sell it today you would earn a total of 27.00 from holding CVS Health or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVS Health vs. CM Hospitalar SA
Performance |
| Timeline |
| CVS Health |
| CM Hospitalar SA |
CVS Health and CM Hospitalar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and CM Hospitalar
The main advantage of trading using opposite CVS Health and CM Hospitalar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, CM Hospitalar 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 CM Hospitalar will offset losses from the drop in CM Hospitalar's long position.| CVS Health vs. Zoom Video Communications | CVS Health vs. Bread Financial Holdings | CVS Health vs. salesforce inc | CVS Health vs. Cognizant Technology Solutions |
| CM Hospitalar vs. Fras le SA | CM Hospitalar vs. Western Digital | CM Hospitalar vs. Clave Indices De | CM Hospitalar vs. BTG Pactual Logstica |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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