Correlation Between Triple S and CVS Health

Can any of the company-specific risk be diversified away by investing in both Triple S 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 Triple S and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Triple S Management and CVS Health Corp, you can compare the effects of market volatilities on Triple S 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 Triple S with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triple S and CVS Health.

Diversification Opportunities for Triple S and CVS Health

0.0

Correlation Coefficient

Triple S  CVS Health

Pay attention - limited upside

The 3 months correlation between Triple and CVS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Triple S Management 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 Triple S 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 Triple S Management 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 Triple S i.e., Triple S and CVS Health go up and down completely randomly.

Pair Corralation between Triple S and CVS Health

If you would invest (100.00) in Triple S Management on January 17, 2024 and sell it today you would earn a total of  100.00  from holding Triple S Management or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Triple S Management  vs.  CVS Health Corp

Triple S Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Triple S Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Triple S is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

CVS Health Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CVS Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Triple S and CVS Health

The main advantage of trading using opposite Triple S and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triple S 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.

The idea behind Triple S Management and CVS Health Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.