Correlation Between Mednax and CVS Health

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Mednax 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 Mednax and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mednax Inc and CVS Health Corp, you can compare the effects of market volatilities on Mednax 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 Mednax with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mednax and CVS Health.

Diversification Opportunities for Mednax and CVS Health

0.27
  Correlation Coefficient

Modest diversification

The 3 months correlation between Mednax and CVS is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mednax Inc 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 Mednax 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 Mednax Inc 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 Mednax i.e., Mednax and CVS Health go up and down completely randomly.

Pair Corralation between Mednax and CVS Health

Allowing for the 90-day total investment horizon Mednax Inc is expected to under-perform the CVS Health. In addition to that, Mednax is 1.7 times more volatile than CVS Health Corp. It trades about -0.05 of its total potential returns per unit of risk. CVS Health Corp is currently generating about -0.02 per unit of volatility. If you would invest  9,858  in CVS Health Corp on December 30, 2023 and sell it today you would lose (1,882) from holding CVS Health Corp or give up 19.09% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Mednax Inc  vs.  CVS Health Corp

 Performance 
       Timeline  
Mednax Inc 

Risk-Adjusted Performance

4 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Mednax Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal fundamental indicators, Mednax may actually be approaching a critical reversion point that can send shares even higher in April 2024.
CVS Health Corp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Weak
Over the last 90 days CVS Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CVS Health is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Mednax and CVS Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mednax and CVS Health

The main advantage of trading using opposite Mednax and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mednax 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.
The idea behind Mednax Inc and CVS Health Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

Other Complementary Tools

Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity