Correlation Between State Street and CVS Health
Can any of the company-specific risk be diversified away by investing in both State Street 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 State Street and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Disciplined and CVS Health Corp, you can compare the effects of market volatilities on State Street 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 State Street with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and CVS Health.
Diversification Opportunities for State Street and CVS Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between State and CVS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding STATE STREET DISCIPLINED 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 State Street 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 State Street Disciplined 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 State Street i.e., State Street and CVS Health go up and down completely randomly.
Pair Corralation between State Street and CVS Health
If you would invest 7,627 in CVS Health Corp on December 29, 2023 and sell it today you would earn a total of 316.00 from holding CVS Health Corp or generate 4.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
STATE STREET DISCIPLINED vs. CVS Health Corp
Performance |
Timeline |
State Street Disciplined |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
CVS Health Corp |
State Street and CVS Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with State Street and CVS Health
The main advantage of trading using opposite State Street and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street 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.State Street vs. Blackrock Exchange Portfolio | State Street vs. Multisector Bond Sma | State Street vs. Dws Money Market | State Street vs. Profunds Money |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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