Correlation Between Grupo Lamosa and CVS Health
Can any of the company-specific risk be diversified away by investing in both Grupo Lamosa 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 Grupo Lamosa and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Lamosa SAB and CVS Health, you can compare the effects of market volatilities on Grupo Lamosa 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 Grupo Lamosa with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Lamosa and CVS Health.
Diversification Opportunities for Grupo Lamosa and CVS Health
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grupo and CVS is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Lamosa SAB and CVS Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health and Grupo Lamosa 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 Grupo Lamosa SAB 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 Grupo Lamosa i.e., Grupo Lamosa and CVS Health go up and down completely randomly.
Pair Corralation between Grupo Lamosa and CVS Health
Assuming the 90 days trading horizon Grupo Lamosa SAB is expected to generate 0.4 times more return on investment than CVS Health. However, Grupo Lamosa SAB is 2.48 times less risky than CVS Health. It trades about -0.16 of its potential returns per unit of risk. CVS Health is currently generating about -0.14 per unit of risk. If you would invest 11,900 in Grupo Lamosa SAB on September 13, 2024 and sell it today you would lose (401.00) from holding Grupo Lamosa SAB or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Grupo Lamosa SAB vs. CVS Health
Performance |
| Timeline |
| Grupo Lamosa SAB |
| CVS Health |
Grupo Lamosa and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Lamosa and CVS Health
The main advantage of trading using opposite Grupo Lamosa and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Lamosa 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.| Grupo Lamosa vs. CVS Health | Grupo Lamosa vs. DXC Technology | Grupo Lamosa vs. Micron Technology | Grupo Lamosa vs. FIBRA Storage |
| CVS Health vs. Monster Beverage Corp | CVS Health vs. McEwen Mining | CVS Health vs. Grupo Carso SAB | CVS Health vs. Genworth Financial |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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