Correlation Between Plaza Centers and CVS Health
Can any of the company-specific risk be diversified away by investing in both Plaza Centers 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 Plaza Centers and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plaza Centers NV and CVS Health Corp, you can compare the effects of market volatilities on Plaza Centers 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 Plaza Centers with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Centers and CVS Health.
Diversification Opportunities for Plaza Centers and CVS Health
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Plaza and CVS is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Centers NV 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 Plaza Centers 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 Plaza Centers NV 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 Plaza Centers i.e., Plaza Centers and CVS Health go up and down completely randomly.
Pair Corralation between Plaza Centers and CVS Health
Assuming the 90 days trading horizon Plaza Centers NV is expected to generate 2.3 times more return on investment than CVS Health. However, Plaza Centers is 2.3 times more volatile than CVS Health Corp. It trades about 0.08 of its potential returns per unit of risk. CVS Health Corp is currently generating about -0.01 per unit of risk. If you would invest 15,790 in Plaza Centers NV on January 24, 2024 and sell it today you would earn a total of 6,110 from holding Plaza Centers NV or generate 38.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.08% |
| Values | Daily Returns |
Plaza Centers NV vs. CVS Health Corp
Performance |
| Timeline |
| Plaza Centers NV |
| CVS Health Corp |
Plaza Centers and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plaza Centers and CVS Health
The main advantage of trading using opposite Plaza Centers and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Centers 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.| Plaza Centers vs. Meitav Dash Investments | Plaza Centers vs. GODM Investments | Plaza Centers vs. Adgar Investments and | Plaza Centers vs. IBI 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |