Correlation Between Lion One and CVS HEALTH
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and CVS HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and CVS HEALTH CDR, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of CVS HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and CVS HEALTH.
Diversification Opportunities for Lion One and CVS HEALTH
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lion and CVS is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals 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 Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and CVS HEALTH go up and down completely randomly.
Pair Corralation between Lion One and CVS HEALTH
Assuming the 90 days horizon Lion One Metals is expected to under-perform the CVS HEALTH. In addition to that, Lion One is 1.8 times more volatile than CVS HEALTH CDR. It trades about -0.07 of its total potential returns per unit of risk. CVS HEALTH CDR is currently generating about -0.03 per unit of volatility. If you would invest 1,808 in CVS HEALTH CDR on September 12, 2024 and sell it today you would lose (434.00) from holding CVS HEALTH CDR or give up 24.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. CVS HEALTH CDR
Performance |
| Timeline |
| Lion One Metals |
| CVS HEALTH CDR |
Lion One and CVS HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and CVS HEALTH
The main advantage of trading using opposite Lion One and CVS HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. Ressources Minieres Radisson | Lion One vs. Galantas Gold Corp | Lion One vs. Red Pine Exploration | Lion One vs. Kore Mining |
| CVS HEALTH vs. Financial 15 Split | CVS HEALTH vs. Quorum Information Technologies | CVS HEALTH vs. Intact Financial Corp | CVS HEALTH vs. CI Financial Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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