This module allows you to analyze existing cross correlation between CVS Health Corporation and Alcoa Corporation. You can compare the effects of market volatilities on CVS Health and Alcoa 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 Alcoa. See also your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Alcoa.
|Horizon||30 Days Login to change|
Compared to the overall equity markets, risk-adjusted returns on investments in CVS Health Corporation are ranked lower than 11 (%) of all global equities and portfolios over the last 30 days. In defiance of relatively fragile forward-looking signals, CVS Health reported solid returns over the last few months and may actually be approaching a breakup point.
Over the last 30 days Alcoa Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in November 2019. The current disturbance may also be a sign of long term up-swing for the company investors.
CVS Health and Alcoa Volatility Contrast
Predicted Return Density
CVS Health Corp. vs. Alcoa Corp.
Considering 30-days investment horizon, CVS Health Corporation is expected to generate 0.53 times more return on investment than Alcoa. However, CVS Health Corporation is 1.88 times less risky than Alcoa. It trades about 0.17 of its potential returns per unit of risk. Alcoa Corporation is currently generating about -0.08 per unit of risk. If you would invest 5,544 in CVS Health Corporation on September 17, 2019 and sell it today you would earn a total of 997.00 from holding CVS Health Corporation or generate 17.98% return on investment over 30 days.
Pair Corralation between CVS Health and Alcoa
|Time Period||3 Months [change]|
Diversification Opportunities for CVS Health and Alcoa
Very good diversification
Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp. and Alcoa Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Alcoa 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 Alcoa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcoa has no effect on the direction of CVS Health i.e. CVS Health and Alcoa go up and down completely randomly.
See also your portfolio center. Please also try Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.