Correlation Between Flgger Group and CVS Health
Can any of the company-specific risk be diversified away by investing in both Flgger Group 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 Flgger Group and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flgger group AS and CVS Health Corp, you can compare the effects of market volatilities on Flgger Group 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 Flgger Group with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flgger Group and CVS Health.
Diversification Opportunities for Flgger Group and CVS Health
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Flgger and CVS is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Flgger group AS 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 Flgger Group 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 Flgger group AS 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 Flgger Group i.e., Flgger Group and CVS Health go up and down completely randomly.
Pair Corralation between Flgger Group and CVS Health
Assuming the 90 days trading horizon Flgger group AS is expected to generate 0.78 times more return on investment than CVS Health. However, Flgger group AS is 1.28 times less risky than CVS Health. It trades about -0.11 of its potential returns per unit of risk. CVS Health Corp is currently generating about -0.14 per unit of risk. If you would invest 34,800 in Flgger group AS on January 24, 2024 and sell it today you would lose (1,800) from holding Flgger group AS or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Flgger group AS vs. CVS Health Corp
Performance |
| Timeline |
| Flgger group AS |
| CVS Health Corp |
Flgger Group and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flgger Group and CVS Health
The main advantage of trading using opposite Flgger Group and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flgger Group 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.| Flgger Group vs. Per Aarsleff Holding | Flgger Group vs. North Media AS | Flgger Group vs. HH International AS | Flgger Group vs. Matas AS |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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