Correlation Between Citizens and GoHealth
Can any of the company-specific risk be diversified away by investing in both Citizens and GoHealth 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 Citizens and GoHealth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens and GoHealth, you can compare the effects of market volatilities on Citizens and GoHealth 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 Citizens with a short position of GoHealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens and GoHealth.
Diversification Opportunities for Citizens and GoHealth
Poor diversification
The 3 months correlation between Citizens and GoHealth is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Citizens and GoHealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoHealth and Citizens 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 Citizens are associated (or correlated) with GoHealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoHealth has no effect on the direction of Citizens i.e., Citizens and GoHealth go up and down completely randomly.
Pair Corralation between Citizens and GoHealth
Considering the 90-day investment horizon Citizens is expected to generate 0.76 times more return on investment than GoHealth. However, Citizens is 1.31 times less risky than GoHealth. It trades about 0.05 of its potential returns per unit of risk. GoHealth is currently generating about 0.02 per unit of risk. If you would invest 260.00 in Citizens on September 2, 2024 and sell it today you would earn a total of 188.00 from holding Citizens or generate 72.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens vs. GoHealth
Performance |
| Timeline |
| Citizens |
| GoHealth |
Citizens and GoHealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens and GoHealth
The main advantage of trading using opposite Citizens and GoHealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens position performs unexpectedly, GoHealth 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 GoHealth will offset losses from the drop in GoHealth's long position.| Citizens vs. CNO Financial Group | Citizens vs. Brighthouse Financial | Citizens vs. FG Annuities Life | Citizens vs. Prudential Public Limited |
| GoHealth vs. eHealth | GoHealth vs. Tian Ruixiang Holdings | GoHealth vs. Huize Holding | GoHealth vs. Selectquote |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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