This module allows you to analyze existing cross correlation between Chevron Corporation and CVS Health Corporation. You can compare the effects of market volatilities on Chevron 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 Chevron with a short position of CVS Health. See also your portfolio center. Please also check ongoing floating volatility patterns of Chevron and CVS Health.
Considering 30-days investment horizon, Chevron Corporation is expected to generate 0.39 times more return on investment than CVS Health. However, Chevron Corporation is 2.54 times less risky than CVS Health. It trades about 0.24 of its potential returns per unit of risk. CVS Health Corporation is currently generating about 0.0 per unit of risk. If you would invest 12,358 in Chevron Corporation on April 21, 2018 and sell it today you would earn a total of 561.00 from holding Chevron Corporation or generate 4.54% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp. and CVS Health Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on CVS Health and Chevron 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 Chevron Corporation 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 Chevron i.e. Chevron and CVS Health go up and down completely randomly.
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