Correlation Between CVS Corp and Magellan Health

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

Diversification Opportunities for CVS Corp and Magellan Health

  Correlation Coefficient

Modest diversification

The 3 months correlation between CVS Corp and Magellan is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding CVS Corp and Magellan Health Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magellan Health and CVS Corp 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 Corp are associated (or correlated) with Magellan Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magellan Health has no effect on the direction of CVS Corp i.e., CVS Corp and Magellan Health go up and down completely randomly.

Pair Corralation between CVS Corp and Magellan Health

Considering the 90-day investment horizon CVS Corp is expected to generate 11.34 times more return on investment than Magellan Health. However, CVS Corp is 11.34 times more volatile than Magellan Health. It trades about 0.05 of its potential returns per unit of risk. Magellan Health is currently generating about 0.04 per unit of risk. If you would invest  7,954  in CVS Corp on April 3, 2022 and sell it today you would earn a total of  1,440  from holding CVS Corp or generate 18.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
ValuesDaily Returns

CVS Corp  vs.  Magellan Health Inc

 Performance (%) 
CVS Corp 
CVS Corp Performance
0 of 100
Over the last 90 days CVS Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, CVS Corp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Structure and Payout Changes

Forward Annual Dividend Yield
Payout Ratio
Last Split Factor
Forward Annual Dividend Rate
Dividend Date
Ex Dividend Date
Last Split Date

CVS Corp Price Channel

Magellan Health 
Magellan Performance
0 of 100
Over the last 90 days Magellan Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Magellan Health is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

CVS Corp and Magellan Health Volatility Contrast

 Predicted Return Density 

Pair Trading with CVS Corp and Magellan Health

The main advantage of trading using opposite CVS Corp and Magellan Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Corp position performs unexpectedly, Magellan 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 Magellan Health will offset losses from the drop in Magellan Health's long position.
The idea behind CVS Corp and Magellan Health 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 CEO Directory module to screen CEOs from public companies around the world.

Other Complementary Tools

Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
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