Correlation Between BG Staffing and CVS Health
Can any of the company-specific risk be diversified away by investing in both BG Staffing 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 BG Staffing and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BG Staffing and CVS Health Corp, you can compare the effects of market volatilities on BG Staffing 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 BG Staffing with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of BG Staffing and CVS Health.
Diversification Opportunities for BG Staffing and CVS Health
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BGSF and CVS is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding BG Staffing 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 BG Staffing 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 BG Staffing 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 BG Staffing i.e., BG Staffing and CVS Health go up and down completely randomly.
Pair Corralation between BG Staffing and CVS Health
Given the investment horizon of 90 days BG Staffing is expected to under-perform the CVS Health. But the stock apears to be less risky and, when comparing its historical volatility, BG Staffing is 1.22 times less risky than CVS Health. The stock trades about -0.35 of its potential returns per unit of risk. The CVS Health Corp is currently generating about -0.28 of returns per unit of risk over similar time horizon. If you would invest 7,822 in CVS Health Corp on January 24, 2024 and sell it today you would lose (859.00) from holding CVS Health Corp or give up 10.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BG Staffing vs. CVS Health Corp
Performance |
| Timeline |
| BG Staffing |
| CVS Health Corp |
BG Staffing and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BG Staffing and CVS Health
The main advantage of trading using opposite BG Staffing and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BG Staffing 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.| BG Staffing vs. Discount Print USA | BG Staffing vs. Cass Information Systems | BG Staffing vs. Maximus | BG Staffing vs. AZZ Incorporated |
| CVS Health vs. Humana Inc | CVS Health vs. Cigna Corp | CVS Health vs. Elevance Health | CVS Health vs. Centene Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |