Correlation Between Aptitude Software and CVS Health

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

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

Diversification Opportunities for Aptitude Software and CVS Health

-0.69

Correlation Coefficient

Aptitude Software  CVS Health

Excellent diversification

The 3 months correlation between Aptitude and CVS is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aptitude Software Group 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 Aptitude Software 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 Aptitude Software Group 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 Aptitude Software i.e., Aptitude Software and CVS Health go up and down completely randomly.

Pair Corralation between Aptitude Software and CVS Health

Assuming the 90 days trading horizon Aptitude Software Group is expected to under-perform the CVS Health. But the stock apears to be less risky and, when comparing its historical volatility, Aptitude Software Group is 1.22 times less risky than CVS Health. The stock trades about -0.12 of its potential returns per unit of risk. The CVS Health Corp is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  4,364  in CVS Health Corp on December 24, 2024 and sell it today you would earn a total of  2,428  from holding CVS Health Corp or generate 55.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.77%
Values	Daily Returns

Aptitude Software Group  vs.  CVS Health Corp

Aptitude Software

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aptitude Software Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CVS Health Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CVS Health Corp are ranked lower than 21 (%) 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.

Pair Trading with Aptitude Software and CVS Health

The main advantage of trading using opposite Aptitude Software and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptitude Software 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 Aptitude Software Group 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.