Correlation Between Kelly Services and CVS Health
Can any of the company-specific risk be diversified away by investing in both Kelly Services 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 Kelly Services and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kelly Services A and CVS Health Corp, you can compare the effects of market volatilities on Kelly Services 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 Kelly Services with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kelly Services and CVS Health.
Diversification Opportunities for Kelly Services and CVS Health
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kelly and CVS is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kelly Services A 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 Kelly Services 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 Kelly Services A 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 Kelly Services i.e., Kelly Services and CVS Health go up and down completely randomly.
Pair Corralation between Kelly Services and CVS Health
Assuming the 90 days horizon Kelly Services is expected to generate 33.99 times less return on investment than CVS Health. But when comparing it to its historical volatility, Kelly Services A is 1.2 times less risky than CVS Health. It trades about 0.01 of its potential returns per unit of risk. CVS Health Corp is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 4,436 in CVS Health Corp on December 25, 2024 and sell it today you would earn a total of 2,321 from holding CVS Health Corp or generate 52.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kelly Services A vs. CVS Health Corp
Performance |
Timeline |
Kelly Services A |
CVS Health Corp |
Kelly Services and CVS Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kelly Services and CVS Health
The main advantage of trading using opposite Kelly Services and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kelly Services 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.Kelly Services vs. Korn Ferry | Kelly Services vs. Heidrick Struggles International | Kelly Services vs. Hudson Global | Kelly Services vs. ManpowerGroup |
CVS Health vs. Humana Inc | CVS Health vs. Cigna Corp | CVS Health vs. Elevance Health | CVS Health vs. Centene Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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