Correlation Between Textron and CVS Health
Can any of the company-specific risk be diversified away by investing in both Textron 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 Textron and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Textron and CVS Health, you can compare the effects of market volatilities on Textron 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 Textron with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Textron and CVS Health.
Diversification Opportunities for Textron and CVS Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Textron and CVS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Textron and CVS Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health and Textron 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 Textron 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 Textron i.e., Textron and CVS Health go up and down completely randomly.
Pair Corralation between Textron and CVS Health
If you would invest 111,000 in CVS Health on September 3, 2024 and sell it today you would earn a total of 10,400 from holding CVS Health or generate 9.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Textron vs. CVS Health
Performance |
| Timeline |
| Textron |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| CVS Health |
Textron and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Textron and CVS Health
The main advantage of trading using opposite Textron and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Textron 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.| Textron vs. First Republic Bank | Textron vs. Costco Wholesale | Textron vs. Verizon Communications | Textron vs. Cognizant Technology Solutions |
| CVS Health vs. The Select Sector | CVS Health vs. Promotora y Operadora | CVS Health vs. SPDR Series Trust | CVS Health vs. Vanguard World |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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