Correlation Analysis Between CVS Health and Home Depot

This module allows you to analyze existing cross correlation between CVS Health Corporation and The Home Depot. You can compare the effects of market volatilities on CVS Health and Home Depot 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 CVS Health with a short position of Home Depot. See also your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Home Depot.
Horizon     30 Days    Login   to change
Symbolsvs
Compare Efficiency

Comparative Performance

CVS Health  
0

Risk-Adjusted Performance

Over the last 30 days CVS Health Corporation has generated negative risk-adjusted returns adding no value to investors with long positions.
Home Depot  
0

Risk-Adjusted Performance

Over the last 30 days The Home Depot has generated negative risk-adjusted returns adding no value to investors with long positions.

CVS Health and Home Depot Volatility Contrast

 Predicted Return Density 
      Returns 

CVS Health Corp.  vs.  The Home Depot Inc

 Performance (%) 
      Timeline 

Pair Volatility

Considering 30-days investment horizon, CVS Health Corporation is expected to generate 1.16 times more return on investment than Home Depot. However, CVS Health is 1.16 times more volatile than The Home Depot. It trades about -0.06 of its potential returns per unit of risk. The Home Depot is currently generating about -0.08 per unit of risk. If you would invest  7,418  in CVS Health Corporation on November 18, 2018 and sell it today you would lose (389.50)  from holding CVS Health Corporation or give up 5.25% of portfolio value over 30 days.

Pair Corralation between CVS Health and Home Depot

0.21
Time Period2 Months [change]
DirectionPositive 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for CVS Health and Home Depot

CVS Health Corp. diversification synergy

Modest diversification

Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp. and The Home Depot Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Home Depot and CVS Health 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 CVS Health Corporation are associated (or correlated) with Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of CVS Health i.e. CVS Health and Home Depot go up and down completely randomly.

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