Correlation Between Zealand Pharma and CVS Health
Can any of the company-specific risk be diversified away by investing in both Zealand Pharma 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 Zealand Pharma and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zealand Pharma AS and CVS Health Corp, you can compare the effects of market volatilities on Zealand Pharma 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 Zealand Pharma with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zealand Pharma and CVS Health.
Diversification Opportunities for Zealand Pharma and CVS Health
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zealand and CVS is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Zealand Pharma 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 Zealand Pharma 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 Zealand Pharma 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 Zealand Pharma i.e., Zealand Pharma and CVS Health go up and down completely randomly.
Pair Corralation between Zealand Pharma and CVS Health
Assuming the 90 days trading horizon Zealand Pharma AS is expected to under-perform the CVS Health. But the stock apears to be less risky and, when comparing its historical volatility, Zealand Pharma AS is 1.06 times less risky than CVS Health. The stock trades about -0.56 of its potential returns per unit of risk. The CVS Health Corp is currently generating about -0.29 of returns per unit of risk over similar time horizon. If you would invest 7,822 in CVS Health Corp on January 24, 2024 and sell it today you would lose (859.00) from holding CVS Health Corp or give up 10.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Zealand Pharma AS vs. CVS Health Corp
Performance |
| Timeline |
| Zealand Pharma AS |
| CVS Health Corp |
Zealand Pharma and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zealand Pharma and CVS Health
The main advantage of trading using opposite Zealand Pharma and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zealand Pharma 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.| Zealand Pharma vs. Ambu AS | Zealand Pharma vs. DSV Panalpina AS | Zealand Pharma vs. Bavarian Nordic | Zealand Pharma vs. GN Store Nord |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |