Correlation Between DAX Index and CVS Health
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By analyzing existing cross correlation between DAX Index and CVS Health, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and CVS Health.
Diversification Opportunities for DAX Index and CVS Health
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAX and CVS is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and CVS Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and CVS Health go up and down completely randomly.
Pair Corralation between DAX Index and CVS Health
Assuming the 90 days trading horizon DAX Index is expected to generate 0.54 times more return on investment than CVS Health. However, DAX Index is 1.86 times less risky than CVS Health. It trades about 0.06 of its potential returns per unit of risk. CVS Health is currently generating about -0.04 per unit of risk. If you would invest 1,417,540 in DAX Index on February 12, 2024 and sell it today you would earn a total of 459,745 from holding DAX Index or generate 32.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
DAX Index vs. CVS Health
Performance |
Timeline |
DAX Index and CVS Health Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
CVS Health
Pair trading matchups for CVS Health
Pair Trading with DAX Index and CVS Health
The main advantage of trading using opposite DAX Index and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.DAX Index vs. Sotherly Hotels | DAX Index vs. MELIA HOTELS | DAX Index vs. Lery Seafood Group | DAX Index vs. INDOFOOD AGRI RES |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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