Correlation Between Gatos Silver and CVS HEALTH
Can any of the company-specific risk be diversified away by investing in both Gatos Silver 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 Gatos Silver and CVS HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gatos Silver and CVS HEALTH CDR, you can compare the effects of market volatilities on Gatos Silver 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 Gatos Silver with a short position of CVS HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gatos Silver and CVS HEALTH.
Diversification Opportunities for Gatos Silver and CVS HEALTH
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gatos and CVS is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver and CVS HEALTH CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS HEALTH CDR and Gatos Silver 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 Gatos Silver 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 CDR has no effect on the direction of Gatos Silver i.e., Gatos Silver and CVS HEALTH go up and down completely randomly.
Pair Corralation between Gatos Silver and CVS HEALTH
Assuming the 90 days trading horizon Gatos Silver is expected to under-perform the CVS HEALTH. But the stock apears to be less risky and, when comparing its historical volatility, Gatos Silver is 1.18 times less risky than CVS HEALTH. The stock trades about -0.17 of its potential returns per unit of risk. The CVS HEALTH CDR is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,367 in CVS HEALTH CDR on September 3, 2024 and sell it today you would earn a total of 111.00 from holding CVS HEALTH CDR or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gatos Silver vs. CVS HEALTH CDR
Performance |
| Timeline |
| Gatos Silver |
| CVS HEALTH CDR |
Gatos Silver and CVS HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gatos Silver and CVS HEALTH
The main advantage of trading using opposite Gatos Silver and CVS HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gatos Silver 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.| Gatos Silver vs. Algoma Steel Group | Gatos Silver vs. Champion Iron | Gatos Silver vs. International Zeolite Corp | Gatos Silver vs. European Residential Real |
| CVS HEALTH vs. Westaim Corp | CVS HEALTH vs. Pulse Seismic | CVS HEALTH vs. Quarterhill | CVS HEALTH vs. TECSYS Inc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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