Correlation Between CVS Health and ATT

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

Diversification Opportunities for CVS Health and ATT

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between CVS and ATT is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and CVS Health 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 CVS Health Corp are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of CVS Health i.e., CVS Health and ATT go up and down completely randomly.

Pair Corralation between CVS Health and ATT

Considering the 90-day investment horizon CVS Health Corp is expected to generate 0.82 times more return on investment than ATT. However, CVS Health Corp is 1.21 times less risky than ATT. It trades about 0.35 of its potential returns per unit of risk. ATT Inc is currently generating about 0.18 per unit of risk. If you would invest  7,519  in CVS Health Corp on December 30, 2023 and sell it today you would earn a total of  457.00  from holding CVS Health Corp or generate 6.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CVS Health Corp  vs.  ATT Inc

 Performance 
       Timeline  
CVS Health Corp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Weak
Over the last 90 days CVS Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CVS Health is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.
ATT Inc 

Risk-Adjusted Performance

4 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ATT is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

CVS Health and ATT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CVS Health and ATT

The main advantage of trading using opposite CVS Health and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.
The idea behind CVS Health Corp and ATT Inc 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 Global Correlations module to find global opportunities by holding instruments from different markets.

Other Complementary Tools

Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
FinTech Suite
Use AI to screen and filter profitable investment opportunities
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Global Correlations
Find global opportunities by holding instruments from different markets
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes