Correlation Between Eguana Technologies and CVS Health
Can any of the company-specific risk be diversified away by investing in both Eguana Technologies 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 Eguana Technologies and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eguana Technologies and CVS Health Corp, you can compare the effects of market volatilities on Eguana Technologies 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 Eguana Technologies with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eguana Technologies and CVS Health.
Diversification Opportunities for Eguana Technologies and CVS Health
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eguana and CVS is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Eguana Technologies 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 Eguana Technologies 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 Eguana Technologies 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 Eguana Technologies i.e., Eguana Technologies and CVS Health go up and down completely randomly.
Pair Corralation between Eguana Technologies and CVS Health
Assuming the 90 days horizon Eguana Technologies is expected to under-perform the CVS Health. In addition to that, Eguana Technologies is 2.89 times more volatile than CVS Health Corp. It trades about -0.22 of its total potential returns per unit of risk. CVS Health Corp is currently generating about -0.29 per unit of volatility. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eguana Technologies vs. CVS Health Corp
Performance |
| Timeline |
| Eguana Technologies |
| CVS Health Corp |
Eguana Technologies and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eguana Technologies and CVS Health
The main advantage of trading using opposite Eguana Technologies and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eguana Technologies 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.| Eguana Technologies vs. Orca Energy Group | Eguana Technologies vs. Rogers Communications | Eguana Technologies vs. Buhler Industries | Eguana Technologies vs. CCL Industries |
| 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 Positions Ratings module to 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.
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