Correlation Between Rogers Sugar and CVS HEALTH
Can any of the company-specific risk be diversified away by investing in both Rogers Sugar 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 Rogers Sugar and CVS HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rogers Sugar and CVS HEALTH CDR, you can compare the effects of market volatilities on Rogers Sugar 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 Rogers Sugar with a short position of CVS HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rogers Sugar and CVS HEALTH.
Diversification Opportunities for Rogers Sugar and CVS HEALTH
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rogers and CVS is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Sugar 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 Rogers Sugar 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 Rogers Sugar 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 Rogers Sugar i.e., Rogers Sugar and CVS HEALTH go up and down completely randomly.
Pair Corralation between Rogers Sugar and CVS HEALTH
Assuming the 90 days trading horizon Rogers Sugar is expected to generate 0.54 times more return on investment than CVS HEALTH. However, Rogers Sugar is 1.85 times less risky than CVS HEALTH. It trades about 0.07 of its potential returns per unit of risk. CVS HEALTH CDR is currently generating about -0.06 per unit of risk. If you would invest 502.00 in Rogers Sugar on September 14, 2024 and sell it today you would earn a total of 101.00 from holding Rogers Sugar or generate 20.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rogers Sugar vs. CVS HEALTH CDR
Performance |
| Timeline |
| Rogers Sugar |
| CVS HEALTH CDR |
Rogers Sugar and CVS HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rogers Sugar and CVS HEALTH
The main advantage of trading using opposite Rogers Sugar and CVS HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers Sugar 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.| Rogers Sugar vs. Extendicare | Rogers Sugar vs. Pizza Pizza Royalty | Rogers Sugar vs. Chemtrade Logistics Income | Rogers Sugar vs. Sienna Senior Living |
| CVS HEALTH vs. Extendicare | CVS HEALTH vs. Sienna Senior Living | CVS HEALTH vs. Rogers Sugar | CVS HEALTH vs. Chemtrade Logistics Income |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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