Correlation Analysis Between CVS Health and Home Depot

This module allows you to analyze existing cross correlation between CVS Health Corporation and Home Depot. 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.
Horizon     30 Days    Login   to change
Symbolsvs
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Comparative Performance

CVS Health  
1212

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in CVS Health Corporation are ranked lower than 12 (%) 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.
Home Depot  
1010

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Home Depot are ranked lower than 10 (%) of all global equities and portfolios over the last 30 days. In spite of rather sluggish fundamental drivers, Home Depot exhibited solid returns over the last few months and may actually be approaching a breakup point.

CVS Health and Home Depot Volatility Contrast

 Predicted Return Density 
      Returns 

CVS Health Corp.  vs.  Home Depot Inc

 Performance (%) 
      Timeline 

Pair Volatility

Considering 30-days investment horizon, CVS Health Corporation is expected to generate 1.24 times more return on investment than Home Depot. However, CVS Health is 1.24 times more volatile than Home Depot. It trades about 0.19 of its potential returns per unit of risk. Home Depot is currently generating about 0.16 per unit of risk. If you would invest  5,499  in CVS Health Corporation on September 20, 2019 and sell it today you would earn a total of  1,117  from holding CVS Health Corporation or generate 20.31% return on investment over 30 days.

Pair Corralation between CVS Health and Home Depot

0.8
Time Period3 Months [change]
DirectionPositive 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for CVS Health and Home Depot

CVS Health Corp. diversification synergy

Very poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp. and Home Depot Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on 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 Home Depot has no effect on the direction of CVS Health i.e. CVS Health and Home Depot go up and down completely randomly.
See also your portfolio center. Please also try Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..


 
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