Correlation Between S E and CVS Health
Can any of the company-specific risk be diversified away by investing in both S E 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 S E and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between S E BANKEN A and CVS Health Corp, you can compare the effects of market volatilities on S E 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 S E with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of S E and CVS Health.
Diversification Opportunities for S E and CVS Health
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between SEBA and CVS is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding S E BANKEN A 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 S E 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 S E BANKEN A 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 S E i.e., S E and CVS Health go up and down completely randomly.
Pair Corralation between S E and CVS Health
Assuming the 90 days trading horizon S E BANKEN A is expected to generate 1.17 times more return on investment than CVS Health. However, S E is 1.17 times more volatile than CVS Health Corp. It trades about 0.05 of its potential returns per unit of risk. CVS Health Corp is currently generating about -0.03 per unit of risk. If you would invest 830.00 in S E BANKEN A on January 21, 2024 and sell it today you would earn a total of 395.00 from holding S E BANKEN A or generate 47.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.63% |
| Values | Daily Returns |
S E BANKEN A vs. CVS Health Corp
Performance |
| Timeline |
| S E BANKEN |
| CVS Health Corp |
S E and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S E and CVS Health
The main advantage of trading using opposite S E and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S E 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.| S E vs. Sekisui Chemical Co | S E vs. WESTLAKE CHEMICAL | S E vs. INDO RAMA SYNTHETIC | S E vs. Silicon Motion Technology |
| CVS Health vs. Certara | CVS Health vs. HealthStream | CVS Health vs. Evolent Health | CVS Health vs. Streamline Health Solutions |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |