Correlation Between Hoteles City and CVS Health
Can any of the company-specific risk be diversified away by investing in both Hoteles City 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 Hoteles City and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoteles City Express and CVS Health, you can compare the effects of market volatilities on Hoteles City 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 Hoteles City with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoteles City and CVS Health.
Diversification Opportunities for Hoteles City and CVS Health
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hoteles and CVS is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hoteles City Express and CVS Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health and Hoteles City 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 Hoteles City Express 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 has no effect on the direction of Hoteles City i.e., Hoteles City and CVS Health go up and down completely randomly.
Pair Corralation between Hoteles City and CVS Health
Assuming the 90 days trading horizon Hoteles City is expected to generate 1.91 times less return on investment than CVS Health. In addition to that, Hoteles City is 1.08 times more volatile than CVS Health. It trades about 0.01 of its total potential returns per unit of risk. CVS Health is currently generating about 0.02 per unit of volatility. If you would invest 112,305 in CVS Health on November 2, 2024 and sell it today you would earn a total of 3,395 from holding CVS Health or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hoteles City Express vs. CVS Health
Performance |
| Timeline |
| Hoteles City Express |
| CVS Health |
Hoteles City and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoteles City and CVS Health
The main advantage of trading using opposite Hoteles City and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoteles City 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.| Hoteles City vs. Controladora Vuela Compaa | Hoteles City vs. Alsea SAB de | Hoteles City vs. Nemak S A | Hoteles City vs. Grupo Comercial Chedraui |
| CVS Health vs. United Airlines Holdings | CVS Health vs. Martin Marietta Materials | CVS Health vs. Hoteles City Express | CVS Health vs. FibraHotel |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |