Correlation Between CVS Health and MyHealthChecked Plc

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

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

Diversification Opportunities for CVS Health and MyHealthChecked Plc

0.55

Correlation Coefficient

CVS Health  MyHealthChecked Plc

Very weak diversification

The 3 months correlation between CVS and MyHealthChecked is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp and MyHealthChecked Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MyHealthChecked Plc and CVS Health 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 CVS Health Corp are associated (or correlated) with MyHealthChecked Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MyHealthChecked Plc has no effect on the direction of CVS Health i.e., CVS Health and MyHealthChecked Plc go up and down completely randomly.

Pair Corralation between CVS Health and MyHealthChecked Plc

Assuming the 90 days trading horizon CVS Health is expected to generate 3.03 times less return on investment than MyHealthChecked Plc. But when comparing it to its historical volatility, CVS Health Corp is 1.29 times less risky than MyHealthChecked Plc. It trades about 0.07 of its potential returns per unit of risk. MyHealthChecked Plc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,200  in MyHealthChecked Plc on December 3, 2024 and sell it today you would earn a total of  550.00  from holding MyHealthChecked Plc or generate 45.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

CVS Health Corp  vs.  MyHealthChecked Plc

CVS Health Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CVS Health Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, CVS Health unveiled solid returns over the last few months and may actually be approaching a breakup point.

MyHealthChecked Plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MyHealthChecked Plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, MyHealthChecked Plc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CVS Health and MyHealthChecked Plc

The main advantage of trading using opposite CVS Health and MyHealthChecked Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, MyHealthChecked Plc 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 MyHealthChecked Plc will offset losses from the drop in MyHealthChecked Plc's long position.

The idea behind CVS Health Corp and MyHealthChecked Plc 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.