Correlation Between Copenhagen Airports and CVS Health
Can any of the company-specific risk be diversified away by investing in both Copenhagen Airports 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 Copenhagen Airports and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copenhagen Airports AS and CVS Health Corp, you can compare the effects of market volatilities on Copenhagen Airports 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 Copenhagen Airports with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copenhagen Airports and CVS Health.
Diversification Opportunities for Copenhagen Airports and CVS Health
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Copenhagen and CVS is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Copenhagen Airports 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 Copenhagen Airports 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 Copenhagen Airports 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 Copenhagen Airports i.e., Copenhagen Airports and CVS Health go up and down completely randomly.
Pair Corralation between Copenhagen Airports and CVS Health
Assuming the 90 days trading horizon Copenhagen Airports AS is expected to under-perform the CVS Health. But the stock apears to be less risky and, when comparing its historical volatility, Copenhagen Airports AS is 1.21 times less risky than CVS Health. The stock trades about -0.39 of its potential returns per unit of risk. The CVS Health Corp is currently generating about -0.32 of returns per unit of risk over similar time horizon. If you would invest 7,806 in CVS Health Corp on January 19, 2024 and sell it today you would lose (946.00) from holding CVS Health Corp or give up 12.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Copenhagen Airports AS vs. CVS Health Corp
Performance |
| Timeline |
| Copenhagen Airports |
| CVS Health Corp |
Copenhagen Airports and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copenhagen Airports and CVS Health
The main advantage of trading using opposite Copenhagen Airports and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copenhagen Airports 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.| Copenhagen Airports vs. Copenhagen Capital AS | Copenhagen Airports vs. Fast Ejendom | Copenhagen Airports vs. Prime Office AS | Copenhagen Airports vs. Formuepleje Limittellus |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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