Correlation Between CVS Health and Ramsay Générale

Can any of the company-specific risk be diversified away by investing in both CVS Health and Ramsay Générale 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 Ramsay Générale 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 Ramsay Gnrale de, you can compare the effects of market volatilities on CVS Health and Ramsay Générale 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 Ramsay Générale. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Ramsay Générale.

Diversification Opportunities for CVS Health and Ramsay Générale

-0.82

Correlation Coefficient

CVS Health  Ramsay Générale

Pay attention - limited upside

The 3 months correlation between CVS and Ramsay is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp and Ramsay Gnrale de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramsay Gnrale de 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 Ramsay Générale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramsay Gnrale de has no effect on the direction of CVS Health i.e., CVS Health and Ramsay Générale go up and down completely randomly.

Pair Corralation between CVS Health and Ramsay Générale

Assuming the 90 days horizon CVS Health Corp is expected to generate 1.15 times more return on investment than Ramsay Générale. However, CVS Health is 1.15 times more volatile than Ramsay Gnrale de. It trades about 0.24 of its potential returns per unit of risk. Ramsay Gnrale de is currently generating about -0.04 per unit of risk. If you would invest  4,211  in CVS Health Corp on December 21, 2024 and sell it today you would earn a total of  2,004  from holding CVS Health Corp or generate 47.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

CVS Health Corp  vs.  Ramsay Gnrale de

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 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CVS Health reported solid returns over the last few months and may actually be approaching a breakup point.

Ramsay Gnrale de

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ramsay Gnrale de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CVS Health and Ramsay Générale

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

The idea behind CVS Health Corp and Ramsay Gnrale de 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.