Correlation Between Q2M Managementberatu and CVS Health

Can any of the company-specific risk be diversified away by investing in both Q2M Managementberatu 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 Q2M Managementberatu and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Q2M Managementberatung AG and CVS Health, you can compare the effects of market volatilities on Q2M Managementberatu 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 Q2M Managementberatu with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q2M Managementberatu and CVS Health.

Diversification Opportunities for Q2M Managementberatu and CVS Health

0.2

Correlation Coefficient

Q2M Managementberatu  CVS Health

Modest diversification

The 3 months correlation between Q2M and CVS is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Q2M Managementberatung AG and CVS Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health and Q2M Managementberatu 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 Q2M Managementberatung 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 Q2M Managementberatu i.e., Q2M Managementberatu and CVS Health go up and down completely randomly.

Pair Corralation between Q2M Managementberatu and CVS Health

If you would invest  5,125  in CVS Health on August 31, 2024 and sell it today you would earn a total of  535.00  from holding CVS Health or generate 10.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Q2M Managementberatung AG  vs.  CVS Health

Q2M Managementberatung

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Q2M Managementberatung AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Q2M Managementberatu is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

CVS Health

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CVS Health are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, CVS Health may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Q2M Managementberatu and CVS Health

The main advantage of trading using opposite Q2M Managementberatu and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q2M Managementberatu 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 Q2M Managementberatung AG and CVS Health 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.