Correlation Between Bright Health and Elevance Health

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

Diversification Opportunities for Bright Health and Elevance Health

0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Bright and Elevance is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bright Health Group and Elevance Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevance Health and Bright 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 Bright Health Group are associated (or correlated) with Elevance Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevance Health has no effect on the direction of Bright Health i.e., Bright Health and Elevance Health go up and down completely randomly.

Pair Corralation between Bright Health and Elevance Health

If you would invest  1,229  in Bright Health Group on August 24, 2024 and sell it today you would earn a total of  0.00  from holding Bright Health Group or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy4.35%
ValuesDaily Returns

Bright Health Group  vs.  Elevance Health

 Performance 
       Timeline  
Bright Health Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bright Health Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Bright Health is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
Elevance Health 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Elevance Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Bright Health and Elevance Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bright Health and Elevance Health

The main advantage of trading using opposite Bright Health and Elevance Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Health position performs unexpectedly, Elevance 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 Elevance Health will offset losses from the drop in Elevance Health's long position.
The idea behind Bright Health Group and Elevance 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 the Content Syndication module to quickly integrate customizable finance content to your own investment portal.

Other Complementary Tools

Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
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
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.