Correlation Between KSM Mutual and CVS Health
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By analyzing existing cross correlation between KSM Mutual Funds and CVS Health Corp, you can compare the effects of market volatilities on KSM Mutual 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 KSM Mutual with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of KSM Mutual and CVS Health.
Diversification Opportunities for KSM Mutual and CVS Health
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KSM and CVS is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding KSM Mutual Funds 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 KSM Mutual 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 KSM Mutual Funds 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 KSM Mutual i.e., KSM Mutual and CVS Health go up and down completely randomly.
Pair Corralation between KSM Mutual and CVS Health
Assuming the 90 days trading horizon KSM Mutual Funds is expected to generate 0.08 times more return on investment than CVS Health. However, KSM Mutual Funds is 12.28 times less risky than CVS Health. It trades about -0.65 of its potential returns per unit of risk. CVS Health Corp is currently generating about -0.32 per unit of risk. If you would invest 348,429 in KSM Mutual Funds on January 25, 2024 and sell it today you would lose (5,873) from holding KSM Mutual Funds or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
KSM Mutual Funds vs. CVS Health Corp
Performance |
| Timeline |
| KSM Mutual Funds |
| CVS Health Corp |
KSM Mutual and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KSM Mutual and CVS Health
The main advantage of trading using opposite KSM Mutual and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KSM Mutual 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.| KSM Mutual vs. KSM Mutual Funds | KSM Mutual vs. KSM Mutual Funds | KSM Mutual vs. KSM Mutual Funds | KSM Mutual vs. KSM Mutual Funds |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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