Correlation Between Batm Advanced and CVS Health
Can any of the company-specific risk be diversified away by investing in both Batm Advanced 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 Batm Advanced and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batm Advanced Communications and CVS Health Corp, you can compare the effects of market volatilities on Batm Advanced 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 Batm Advanced with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and CVS Health.
Diversification Opportunities for Batm Advanced and CVS Health
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Batm and CVS is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications 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 Batm Advanced 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 Batm Advanced Communications 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 Batm Advanced i.e., Batm Advanced and CVS Health go up and down completely randomly.
Pair Corralation between Batm Advanced and CVS Health
Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the CVS Health. In addition to that, Batm Advanced is 1.63 times more volatile than CVS Health Corp. It trades about -0.03 of its total potential returns per unit of risk. CVS Health Corp is currently generating about 0.02 per unit of volatility. If you would invest 6,675 in CVS Health Corp on January 26, 2024 and sell it today you would earn a total of 102.00 from holding CVS Health Corp or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 81.15% |
| Values | Daily Returns |
Batm Advanced Communications vs. CVS Health Corp
Performance |
| Timeline |
| Batm Advanced Commun |
| CVS Health Corp |
Batm Advanced and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and CVS Health
The main advantage of trading using opposite Batm Advanced and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced 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.| Batm Advanced vs. ICL Israel Chemicals | Batm Advanced vs. Scope Metals Group | Batm Advanced vs. B Communications | Batm Advanced vs. Rapac Communication Infrastructure |
| CVS Health vs. Humana Inc | CVS Health vs. Cigna Corp | CVS Health vs. Elevance Health | CVS Health vs. Centene Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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