Correlation Analysis Between Home Depot and CVS Health

This module allows you to analyze existing cross correlation between The Home Depot and CVS Health Corporation. You can compare the effects of market volatilities on Home Depot 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 Home Depot with a short position of CVS Health. See also your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and CVS Health.
Horizon     30 Days    Login   to change
Symbolsvs
Compare Efficiency

Comparative Performance

Home Depot  
0

Risk-Adjusted Performance

Over the last 30 days The Home Depot has generated negative risk-adjusted returns adding no value to investors with long positions.
CVS Health  
0

Risk-Adjusted Performance

Over the last 30 days CVS Health Corporation has generated negative risk-adjusted returns adding no value to investors with long positions.

Home Depot and CVS Health Volatility Contrast

 Predicted Return Density 
      Returns 

The Home Depot Inc  vs.  CVS Health Corp.

 Performance (%) 
      Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, The Home Depot is expected to under-perform the CVS Health. But the stock apears to be less risky and, when comparing its historical volatility, The Home Depot is 1.16 times less risky than CVS Health. The stock trades about -0.08 of its potential returns per unit of risk. The CVS Health Corporation is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  7,418  in CVS Health Corporation on November 18, 2018 and sell it today you would lose (389.50)  from holding CVS Health Corporation or give up 5.25% of portfolio value over 30 days.

Pair Corralation between Home Depot and CVS Health

0.21
Time Period2 Months [change]
DirectionPositive 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Home Depot and CVS Health

The Home Depot Inc diversification synergy

Modest diversification

Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot Inc and CVS Health Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on CVS Health and Home Depot 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 The Home Depot 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 has no effect on the direction of Home Depot i.e. Home Depot and CVS Health go up and down completely randomly.

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