Correlation Between Electrocore LLC and CVS Health
Can any of the company-specific risk be diversified away by investing in both Electrocore LLC and CVS Health 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 Electrocore LLC and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrocore LLC and CVS Health Corp, you can compare the effects of market volatilities on Electrocore LLC and CVS Health 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 Electrocore LLC with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrocore LLC and CVS Health.
Diversification Opportunities for Electrocore LLC and CVS Health
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electrocore and CVS is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Electrocore LLC and CVS Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health Corp and Electrocore LLC 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 Electrocore LLC are associated (or correlated) with CVS Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS Health Corp has no effect on the direction of Electrocore LLC i.e., Electrocore LLC and CVS Health go up and down completely randomly.
Pair Corralation between Electrocore LLC and CVS Health
Given the investment horizon of 90 days Electrocore LLC is expected to generate 1.67 times less return on investment than CVS Health. In addition to that, Electrocore LLC is 2.32 times more volatile than CVS Health Corp. It trades about 0.12 of its total potential returns per unit of risk. CVS Health Corp is currently generating about 0.45 per unit of volatility. If you would invest 4,378 in CVS Health Corp on October 20, 2024 and sell it today you would earn a total of 884.00 from holding CVS Health Corp or generate 20.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrocore LLC vs. CVS Health Corp
Performance |
| Timeline |
| Electrocore LLC |
| CVS Health Corp |
Electrocore LLC and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrocore LLC and CVS Health
The main advantage of trading using opposite Electrocore LLC and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrocore LLC position performs unexpectedly, CVS Health 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 CVS Health will offset losses from the drop in CVS Health's long position.| Electrocore LLC vs. STRATA Skin Sciences | Electrocore LLC vs. Sight Sciences | Electrocore LLC vs. Neuropace | Electrocore LLC vs. IRIDEX |
| CVS Health vs. Cigna Corp | CVS Health vs. Definitive Healthcare Corp | CVS Health vs. Edwards Lifesciences Corp | CVS Health vs. Guardant Health |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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