Correlation Between Lupatech and CVS Health

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Lupatech 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 Lupatech and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lupatech SA and CVS Health Corp, you can compare the effects of market volatilities on Lupatech 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 Lupatech with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lupatech and CVS Health.

Diversification Opportunities for Lupatech and CVS Health

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Lupatech and CVS is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lupatech SA 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 Lupatech 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 Lupatech SA 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 Lupatech i.e., Lupatech and CVS Health go up and down completely randomly.

Pair Corralation between Lupatech and CVS Health

Assuming the 90 days trading horizon Lupatech SA is expected to under-perform the CVS Health. In addition to that, Lupatech is 2.9 times more volatile than CVS Health Corp. It trades about -0.02 of its total potential returns per unit of risk. CVS Health Corp is currently generating about -0.02 per unit of volatility. If you would invest  10,062  in CVS Health Corp on December 29, 2023 and sell it today you would lose (2,119) from holding CVS Health Corp or give up 21.06% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.39%
ValuesDaily Returns

Lupatech SA  vs.  CVS Health Corp

 Performance 
       Timeline  
Lupatech SA 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Lupatech SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
CVS Health Corp 

Risk-Adjusted Performance

1 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in CVS Health Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CVS Health is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Lupatech and CVS Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lupatech and CVS Health

The main advantage of trading using opposite Lupatech and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lupatech 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 Lupatech SA 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.
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

Other Complementary Tools

Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Commodity Directory
Find actively traded commodities issued by global exchanges
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm