Correlation Between Alstria Office and CVS Health
Can any of the company-specific risk be diversified away by investing in both Alstria Office 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 Alstria Office and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between alstria office REIT AG and CVS Health, you can compare the effects of market volatilities on Alstria Office 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 Alstria Office with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and CVS Health.
Diversification Opportunities for Alstria Office and CVS Health
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alstria and CVS is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and CVS Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health and Alstria Office 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 alstria office REIT AG 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 has no effect on the direction of Alstria Office i.e., Alstria Office and CVS Health go up and down completely randomly.
Pair Corralation between Alstria Office and CVS Health
Assuming the 90 days horizon alstria office REIT AG is expected to generate 0.57 times more return on investment than CVS Health. However, alstria office REIT AG is 1.74 times less risky than CVS Health. It trades about 0.28 of its potential returns per unit of risk. CVS Health is currently generating about -0.13 per unit of risk. If you would invest 606.00 in alstria office REIT AG on September 23, 2024 and sell it today you would earn a total of 154.00 from holding alstria office REIT AG or generate 25.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
alstria office REIT AG vs. CVS Health
Performance |
Timeline |
alstria office REIT |
CVS Health |
Alstria Office and CVS Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alstria Office and CVS Health
The main advantage of trading using opposite Alstria Office and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office 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.Alstria Office vs. EAT WELL INVESTMENT | Alstria Office vs. ScanSource | Alstria Office vs. National Beverage Corp | Alstria Office vs. Gladstone Investment |
CVS Health vs. SALESFORCE INC CDR | CVS Health vs. NURAN WIRELESS INC | CVS Health vs. Carsales | CVS Health vs. KENEDIX OFFICE INV |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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