Correlation Between Phoenix Holdings and CVS Health
Can any of the company-specific risk be diversified away by investing in both Phoenix Holdings 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 Phoenix Holdings and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Phoenix Holdings and CVS Health Corp, you can compare the effects of market volatilities on Phoenix Holdings 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 Phoenix Holdings with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix Holdings and CVS Health.
Diversification Opportunities for Phoenix Holdings and CVS Health
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Phoenix and CVS is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding The Phoenix Holdings 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 Phoenix Holdings 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 The Phoenix Holdings 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 Phoenix Holdings i.e., Phoenix Holdings and CVS Health go up and down completely randomly.
Pair Corralation between Phoenix Holdings and CVS Health
Assuming the 90 days trading horizon The Phoenix Holdings is expected to generate 1.4 times more return on investment than CVS Health. However, Phoenix Holdings is 1.4 times more volatile than CVS Health Corp. It trades about -0.05 of its potential returns per unit of risk. CVS Health Corp is currently generating about -0.34 per unit of risk. If you would invest 362,182 in The Phoenix Holdings on January 25, 2024 and sell it today you would lose (9,182) from holding The Phoenix Holdings or give up 2.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
The Phoenix Holdings vs. CVS Health Corp
Performance |
| Timeline |
| Phoenix Holdings |
| CVS Health Corp |
Phoenix Holdings and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phoenix Holdings and CVS Health
The main advantage of trading using opposite Phoenix Holdings and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix Holdings 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.| Phoenix Holdings vs. Harel Insurance Investments | Phoenix Holdings vs. Migdal Insurance | Phoenix Holdings vs. Menora Miv Hld | Phoenix Holdings vs. Israel Discount Bank |
| 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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