Correlation Between Akouos and CVS Corp

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

Diversification Opportunities for Akouos and CVS Corp

-0.23
  Correlation Coefficient

Very good diversification

The 3 months correlation between Akouos and CVS Corp is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Akouos Inc and CVS Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Corp and Akouos 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 Akouos Inc are associated (or correlated) with CVS Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS Corp has no effect on the direction of Akouos i.e., Akouos and CVS Corp go up and down completely randomly.

Pair Corralation between Akouos and CVS Corp

Given the investment horizon of 90 days Akouos Inc is expected to generate 6.84 times more return on investment than CVS Corp. However, Akouos is 6.84 times more volatile than CVS Corp. It trades about 0.28 of its potential returns per unit of risk. CVS Corp is currently generating about -0.12 per unit of risk. If you would invest  335.00  in Akouos Inc on June 30, 2022 and sell it today you would earn a total of  175.00  from holding Akouos Inc or generate 52.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Akouos Inc  vs.  CVS Corp

 Performance (%) 
       Timeline  
Akouos Inc 
Akouos Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Akouos Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Akouos reported solid returns over the last few months and may actually be approaching a breakup point.

Akouos Price Channel

CVS Corp 
CVS Corp Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in CVS Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, CVS Corp is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

CVS Corp Price Channel

Akouos and CVS Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Akouos and CVS Corp

The main advantage of trading using opposite Akouos and CVS Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akouos position performs unexpectedly, CVS Corp 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 Corp will offset losses from the drop in CVS Corp's long position.
Akouos vs. Clearwater Paper Corp
The idea behind Akouos Inc and CVS 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.
CVS Corp vs. Clearwater Paper Corp
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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