Correlation Analysis Between Home Depot and CVS Health

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

Home Depot  
2020

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in The Home Depot are ranked lower than 20 (%) of all global equities and portfolios over the last 30 days. In spite of rather sluggish fundamental drivers, Home Depot exhibited solid returns over the last few months and may actually be approaching a breakup point.
CVS Health  
77

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in CVS Health Corporation are ranked lower than 7 (%) of all global equities and portfolios over the last 30 days. In defiance of relatively fragile forward-looking signals, CVS Health may actually be approaching a critical reversion point that can send shares even higher in August 2019.

Home Depot and CVS Health Volatility Contrast

 Predicted Return Density 
      Returns 

The Home Depot Inc  vs.  CVS Health Corp.

 Performance (%) 
      Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, The Home Depot is expected to generate 0.72 times more return on investment than CVS Health. However, The Home Depot is 1.38 times less risky than CVS Health. It trades about 0.3 of its potential returns per unit of risk. CVS Health Corporation is currently generating about 0.12 per unit of risk. If you would invest  18,964  in The Home Depot on June 19, 2019 and sell it today you would earn a total of  2,480  from holding The Home Depot or generate 13.08% return on investment over 30 days.

Pair Corralation between Home Depot and CVS Health

0.84
Time Period2 Months [change]
DirectionPositive 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Home Depot and CVS Health

The Home Depot Inc diversification synergy

Very poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot Inc and CVS Health Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on CVS Health and Home Depot 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 The Home Depot 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 Home Depot i.e. Home Depot and CVS Health go up and down completely randomly.
See also your portfolio center. Please also try Bollinger Bands module to use bollinger bands indicator to analyze target price for a given investing horizon.


 
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