Correlation Between Swire Properties and CVS Health
Can any of the company-specific risk be diversified away by investing in both Swire Properties 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 Swire Properties and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swire Properties Limited and CVS Health, you can compare the effects of market volatilities on Swire Properties 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 Swire Properties with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swire Properties and CVS Health.
Diversification Opportunities for Swire Properties and CVS Health
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Swire and CVS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Swire Properties Limited and CVS Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health and Swire Properties 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 Swire Properties Limited 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 Swire Properties i.e., Swire Properties and CVS Health go up and down completely randomly.
Pair Corralation between Swire Properties and CVS Health
Assuming the 90 days horizon Swire Properties Limited is expected to under-perform the CVS Health. But the stock apears to be less risky and, when comparing its historical volatility, Swire Properties Limited is 2.59 times less risky than CVS Health. The stock trades about -0.01 of its potential returns per unit of risk. The CVS Health is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,194 in CVS Health on September 1, 2024 and sell it today you would earn a total of 461.00 from holding CVS Health or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Swire Properties Limited vs. CVS Health
Performance |
| Timeline |
| Swire Properties |
| CVS Health |
Swire Properties and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swire Properties and CVS Health
The main advantage of trading using opposite Swire Properties and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swire Properties 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.| Swire Properties vs. CBRE Group Class | Swire Properties vs. Superior Plus Corp | Swire Properties vs. NMI Holdings | Swire Properties vs. Origin Agritech |
| CVS Health vs. SIVERS SEMICONDUCTORS AB | CVS Health vs. Darden Restaurants | CVS Health vs. Reliance Steel Aluminum | CVS Health vs. Q2M Managementberatung AG |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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