Correlation Between CVS Health and Cardio Diagnostics

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

By analyzing existing cross correlation between CVS Health Corp and Cardio Diagnostics Holdings, you can compare the effects of market volatilities on CVS Health and Cardio Diagnostics 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 Cardio Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Cardio Diagnostics.

Diversification Opportunities for CVS Health and Cardio Diagnostics

0.11

Correlation Coefficient

CVS Health  Cardio Diagnostics

Average diversification

The 3 months correlation between CVS and Cardio is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp and Cardio Diagnostics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardio Diagnostics 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 Corp are associated (or correlated) with Cardio Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardio Diagnostics has no effect on the direction of CVS Health i.e., CVS Health and Cardio Diagnostics go up and down completely randomly.

Pair Corralation between CVS Health and Cardio Diagnostics

Considering the 90-day investment horizon CVS Health Corp is expected to generate 0.29 times more return on investment than Cardio Diagnostics. However, CVS Health Corp is 3.41 times less risky than Cardio Diagnostics. It trades about 0.05 of its potential returns per unit of risk. Cardio Diagnostics Holdings is currently generating about -0.03 per unit of risk. If you would invest  7,318  in CVS Health Corp on September 5, 2025 and sell it today you would earn a total of  357.00  from holding CVS Health Corp or generate 4.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CVS Health Corp  vs.  Cardio Diagnostics Holdings

CVS Health Corp

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in CVS Health Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CVS Health is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Cardio Diagnostics

Risk-Adjusted Performance

Weakest

Over the last 90 days Cardio Diagnostics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with CVS Health and Cardio Diagnostics

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

The idea behind CVS Health Corp and Cardio Diagnostics Holdings 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.