Correlation Between CVS HEALTH and Waste Management,

Can any of the company-specific risk be diversified away by investing in both CVS HEALTH and Waste Management, 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 CVS HEALTH and Waste Management, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CVS HEALTH CDR and Waste Management,, you can compare the effects of market volatilities on CVS HEALTH and Waste Management, 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 CVS HEALTH with a short position of Waste Management,. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS HEALTH and Waste Management,.

Diversification Opportunities for CVS HEALTH and Waste Management,

-0.02

Correlation Coefficient

CVS HEALTH  Waste Management,

Good diversification

The 3 months correlation between CVS and Waste is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding CVS HEALTH CDR and Waste Management, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management, and CVS HEALTH 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 CVS HEALTH CDR are associated (or correlated) with Waste Management,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management, has no effect on the direction of CVS HEALTH i.e., CVS HEALTH and Waste Management, go up and down completely randomly.

Pair Corralation between CVS HEALTH and Waste Management,

Assuming the 90 days trading horizon CVS HEALTH CDR is expected to under-perform the Waste Management,. In addition to that, CVS HEALTH is 1.69 times more volatile than Waste Management,. It trades about -0.04 of its total potential returns per unit of risk. Waste Management, is currently generating about -0.04 per unit of volatility. If you would invest  2,275  in Waste Management, on May 5, 2025 and sell it today you would lose (65.00) from holding Waste Management, or give up 2.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

CVS HEALTH CDR  vs.  Waste Management,

CVS HEALTH CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days CVS HEALTH CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, CVS HEALTH is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Waste Management,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Waste Management, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Waste Management, is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CVS HEALTH and Waste Management,

The main advantage of trading using opposite CVS HEALTH and Waste Management, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS HEALTH position performs unexpectedly, Waste Management, 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 Waste Management, will offset losses from the drop in Waste Management,'s long position.

The idea behind CVS HEALTH CDR and Waste Management, 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.