Correlation Between Inbar Group and CVS Health
Can any of the company-specific risk be diversified away by investing in both Inbar 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 Inbar 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 Inbar Group Finance and CVS Health Corp, you can compare the effects of market volatilities on Inbar 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 Inbar Group with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inbar Group and CVS Health.
Diversification Opportunities for Inbar Group and CVS Health
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inbar and CVS is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Inbar Group Finance 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 Inbar 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 Inbar Group Finance 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 Inbar Group i.e., Inbar Group and CVS Health go up and down completely randomly.
Pair Corralation between Inbar Group and CVS Health
Assuming the 90 days trading horizon Inbar Group Finance is expected to generate 32.59 times more return on investment than CVS Health. However, Inbar Group is 32.59 times more volatile than CVS Health Corp. It trades about 0.04 of its potential returns per unit of risk. CVS Health Corp is currently generating about -0.02 per unit of risk. If you would invest 25,970 in Inbar Group Finance on December 30, 2023 and sell it today you would earn a total of 16,190 from holding Inbar Group Finance or generate 62.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 78.95% |
Values | Daily Returns |
Inbar Group Finance vs. CVS Health Corp
Performance |
Timeline |
Inbar Group Finance |
CVS Health Corp |
Inbar Group and CVS Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Inbar Group and CVS Health
The main advantage of trading using opposite Inbar Group and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inbar 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.Inbar Group vs. B Communications | Inbar Group vs. Scope Metals Group | Inbar Group vs. Batm Advanced Communications | Inbar Group vs. Harel Insurance Investments |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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