Correlation Between Centene Corp and American Shared
Can any of the company-specific risk be diversified away by investing in both Centene Corp and American Shared 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 Centene Corp and American Shared into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centene Corp and American Shared Hospital, you can compare the effects of market volatilities on Centene Corp and American Shared 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 Centene Corp with a short position of American Shared. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centene Corp and American Shared.
Diversification Opportunities for Centene Corp and American Shared
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centene and American is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Centene Corp and American Shared Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shared Hospital and Centene 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 Centene Corp are associated (or correlated) with American Shared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shared Hospital has no effect on the direction of Centene Corp i.e., Centene Corp and American Shared go up and down completely randomly.
Pair Corralation between Centene Corp and American Shared
Considering the 90-day investment horizon Centene Corp is expected to under-perform the American Shared. But the stock apears to be less risky and, when comparing its historical volatility, Centene Corp is 1.39 times less risky than American Shared. The stock trades about -0.04 of its potential returns per unit of risk. The American Shared Hospital is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 245.00 in American Shared Hospital on September 5, 2024 and sell it today you would earn a total of 80.00 from holding American Shared Hospital or generate 32.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centene Corp vs. American Shared Hospital
Performance |
| Timeline |
| Centene Corp |
| American Shared Hospital |
Centene Corp and American Shared Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centene Corp and American Shared
The main advantage of trading using opposite Centene Corp and American Shared positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centene Corp position performs unexpectedly, American Shared 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 American Shared will offset losses from the drop in American Shared's long position.| Centene Corp vs. Humana Inc | Centene Corp vs. Elevance Health | Centene Corp vs. UnitedHealth Group Incorporated | Centene Corp vs. Molina Healthcare |
| American Shared vs. Ramsay Health Care | American Shared vs. Medical Facilities | American Shared vs. Jack Nathan Medical | American Shared vs. Fresenius SE Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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