Correlation Between CVS Health and STAG Industrial,

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

By analyzing existing cross correlation between CVS Health and STAG Industrial,, you can compare the effects of market volatilities on CVS Health and STAG Industrial, 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 STAG Industrial,. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and STAG Industrial,.

Diversification Opportunities for CVS Health and STAG Industrial,

-0.45

Correlation Coefficient

CVS Health  STAG Industrial,

Very good diversification

The 3 months correlation between CVS and STAG is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health and STAG Industrial, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAG Industrial, 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 are associated (or correlated) with STAG Industrial,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAG Industrial, has no effect on the direction of CVS Health i.e., CVS Health and STAG Industrial, go up and down completely randomly.

Pair Corralation between CVS Health and STAG Industrial,

Assuming the 90 days trading horizon CVS Health is expected to under-perform the STAG Industrial,. In addition to that, CVS Health is 1.25 times more volatile than STAG Industrial,. It trades about -0.06 of its total potential returns per unit of risk. STAG Industrial, is currently generating about 0.08 per unit of volatility. If you would invest  3,735  in STAG Industrial, on April 24, 2025 and sell it today you would earn a total of  281.00  from holding STAG Industrial, or generate 7.52% return on investment over 90 days.

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

CVS Health  vs.  STAG Industrial,

CVS Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days CVS Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

STAG Industrial,

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in STAG Industrial, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, STAG Industrial, may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with CVS Health and STAG Industrial,

The main advantage of trading using opposite CVS Health and STAG Industrial, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health position performs unexpectedly, STAG Industrial, 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 STAG Industrial, will offset losses from the drop in STAG Industrial,'s long position.

The idea behind CVS Health and STAG Industrial, 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.