This module allows you to analyze existing cross correlation between CVS Health Corporation and The Home Depot Inc. You can compare the effects of market volatilities on CVS Health and Home Depot 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 Home Depot. See also your portfolio center
. Please also check ongoing floating volatility patterns of CVS Health
and Home Depot
CVS Health Corp. vs The Home Depot Inc
Considering 30-days investment horizon, CVS Health Corporation is expected to under-perform the Home Depot. But the stock apears to be less risky and, when comparing its historical volatility, CVS Health Corporation is 1.1 times less risky than Home Depot. The stock trades about -0.42 of its potential returns per unit of risk. The The Home Depot Inc is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 20,723 in The Home Depot Inc on January 26, 2018 and sell it today you would lose (1,888) from holding The Home Depot Inc or give up 9.11% of portfolio value over 30 days.
|Time Period||1 Month [change]|
Almost no diversification
Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp. and The Home Depot Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on The Home Depot 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 Corporation are associated (or correlated) with Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Home Depot has no effect on the direction of CVS Health i.e. CVS Health and Home Depot go up and down completely randomly.
Over the last 30 days CVS Health Corporation has generated negative risk-adjusted returns adding no value to investors with long positions.
Over the last 30 days The Home Depot Inc has generated negative risk-adjusted returns adding no value to investors with long positions.