Correlation Between SSP Group and CVS Health
Can any of the company-specific risk be diversified away by investing in both SSP Group 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 SSP Group and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSP Group PLC and CVS Health Corp, you can compare the effects of market volatilities on SSP Group 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 SSP Group with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSP Group and CVS Health.
Diversification Opportunities for SSP Group and CVS Health
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SSP and CVS is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SSP Group PLC and CVS Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health Corp and SSP Group 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 SSP Group PLC 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 Corp has no effect on the direction of SSP Group i.e., SSP Group and CVS Health go up and down completely randomly.
Pair Corralation between SSP Group and CVS Health
Assuming the 90 days trading horizon SSP Group PLC is expected to under-perform the CVS Health. But the stock apears to be less risky and, when comparing its historical volatility, SSP Group PLC is 1.6 times less risky than CVS Health. The stock trades about -0.01 of its potential returns per unit of risk. The CVS Health Corp is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 4,396 in CVS Health Corp on October 24, 2024 and sell it today you would earn a total of 862.00 from holding CVS Health Corp or generate 19.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
SSP Group PLC vs. CVS Health Corp
Performance |
| Timeline |
| SSP Group PLC |
| CVS Health Corp |
SSP Group and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSP Group and CVS Health
The main advantage of trading using opposite SSP Group and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSP Group 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.| SSP Group vs. United Utilities Group | SSP Group vs. BlackRock Frontiers Investment | SSP Group vs. European Metals Holdings | SSP Group vs. Jupiter Green Investment |
| CVS Health vs. Wizz Air Holdings | CVS Health vs. Sartorius Stedim Biotech | CVS Health vs. SMA Solar Technology | CVS Health vs. Symphony Environmental Technologies |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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