Correlation Between Brown Brown and Centene Corp
Can any of the company-specific risk be diversified away by investing in both Brown Brown and Centene 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 Brown Brown and Centene Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brown Brown and Centene Corp, you can compare the effects of market volatilities on Brown Brown and Centene 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 Brown Brown with a short position of Centene Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brown Brown and Centene Corp.
Diversification Opportunities for Brown Brown and Centene Corp
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brown and Centene is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Brown Brown and Centene Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centene Corp and Brown Brown 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 Brown Brown are associated (or correlated) with Centene Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centene Corp has no effect on the direction of Brown Brown i.e., Brown Brown and Centene Corp go up and down completely randomly.
Pair Corralation between Brown Brown and Centene Corp
Considering the 90-day investment horizon Brown Brown is expected to generate 0.58 times more return on investment than Centene Corp. However, Brown Brown is 1.72 times less risky than Centene Corp. It trades about 0.33 of its potential returns per unit of risk. Centene Corp is currently generating about -0.08 per unit of risk. If you would invest 10,449 in Brown Brown on September 1, 2024 and sell it today you would earn a total of 861.00 from holding Brown Brown or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brown Brown vs. Centene Corp
Performance |
| Timeline |
| Brown Brown |
| Centene Corp |
Brown Brown and Centene Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brown Brown and Centene Corp
The main advantage of trading using opposite Brown Brown and Centene Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brown Brown position performs unexpectedly, Centene 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 Centene Corp will offset losses from the drop in Centene Corp's long position.| Brown Brown vs. Marsh McLennan Companies | Brown Brown vs. Aon PLC | Brown Brown vs. Willis Towers Watson | Brown Brown vs. Erie Indemnity |
| Centene Corp vs. Humana Inc | Centene Corp vs. Elevance Health | Centene Corp vs. UnitedHealth Group Incorporated | Centene Corp vs. CVS Health 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 the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |