Correlation Between American Beacon and CVS Health
Can any of the company-specific risk be diversified away by investing in both American Beacon 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 American Beacon and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Mid Cap and CVS Health Corp, you can compare the effects of market volatilities on American Beacon 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 American Beacon with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and CVS Health.
Diversification Opportunities for American Beacon and CVS Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and CVS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Mid Cap 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 American Beacon 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 American Beacon Mid Cap 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 American Beacon i.e., American Beacon and CVS Health go up and down completely randomly.
Pair Corralation between American Beacon and CVS Health
If you would invest (100.00) in American Beacon Mid Cap on January 24, 2024 and sell it today you would earn a total of 100.00 from holding American Beacon Mid Cap or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
American Beacon Mid Cap vs. CVS Health Corp
Performance |
Timeline |
American Beacon Mid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CVS Health Corp |
American Beacon and CVS Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Beacon and CVS Health
The main advantage of trading using opposite American Beacon and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon 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.American Beacon vs. Franklin Adjustable Government | American Beacon vs. Payden Government Fund | American Beacon vs. Dreyfus Government Cash | American Beacon vs. Elfun Government Money |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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