Correlation Between SUMMARECON AGUNG and CVS Health
Can any of the company-specific risk be diversified away by investing in both SUMMARECON AGUNG 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 SUMMARECON AGUNG and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUMMARECON AGUNG and CVS Health, you can compare the effects of market volatilities on SUMMARECON AGUNG 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 SUMMARECON AGUNG with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUMMARECON AGUNG and CVS Health.
Diversification Opportunities for SUMMARECON AGUNG and CVS Health
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SUMMARECON and CVS is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding SUMMARECON AGUNG and CVS Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health and SUMMARECON AGUNG 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 SUMMARECON AGUNG 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 SUMMARECON AGUNG i.e., SUMMARECON AGUNG and CVS Health go up and down completely randomly.
Pair Corralation between SUMMARECON AGUNG and CVS Health
Assuming the 90 days trading horizon SUMMARECON AGUNG is expected to generate 3.75 times more return on investment than CVS Health. However, SUMMARECON AGUNG is 3.75 times more volatile than CVS Health. It trades about 0.04 of its potential returns per unit of risk. CVS Health is currently generating about -0.02 per unit of risk. If you would invest 2.25 in SUMMARECON AGUNG on September 14, 2024 and sell it today you would lose (0.05) from holding SUMMARECON AGUNG or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
SUMMARECON AGUNG vs. CVS Health
Performance |
| Timeline |
| SUMMARECON AGUNG |
| CVS Health |
SUMMARECON AGUNG and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUMMARECON AGUNG and CVS Health
The main advantage of trading using opposite SUMMARECON AGUNG and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUMMARECON AGUNG 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.| SUMMARECON AGUNG vs. TYSON FOODS A | SUMMARECON AGUNG vs. Lifeway Foods | SUMMARECON AGUNG vs. STMicroelectronics NV | SUMMARECON AGUNG vs. STMICROELECTRONICS |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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