Correlation Between Centene Corp and AXIS Capital
Can any of the company-specific risk be diversified away by investing in both Centene Corp and AXIS Capital 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 AXIS Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centene Corp and AXIS Capital Holdings, you can compare the effects of market volatilities on Centene Corp and AXIS Capital 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 AXIS Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centene Corp and AXIS Capital.
Diversification Opportunities for Centene Corp and AXIS Capital
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centene and AXIS is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Centene Corp and AXIS Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXIS Capital Holdings 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 AXIS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXIS Capital Holdings has no effect on the direction of Centene Corp i.e., Centene Corp and AXIS Capital go up and down completely randomly.
Pair Corralation between Centene Corp and AXIS Capital
Considering the 90-day investment horizon Centene Corp is expected to under-perform the AXIS Capital. In addition to that, Centene Corp is 1.34 times more volatile than AXIS Capital Holdings. It trades about -0.18 of its total potential returns per unit of risk. AXIS Capital Holdings is currently generating about 0.13 per unit of volatility. If you would invest 9,081 in AXIS Capital Holdings on November 27, 2024 and sell it today you would earn a total of 363.00 from holding AXIS Capital Holdings or generate 4.0% 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. AXIS Capital Holdings
Performance |
| Timeline |
| Centene Corp |
| AXIS Capital Holdings |
Centene Corp and AXIS Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centene Corp and AXIS Capital
The main advantage of trading using opposite Centene Corp and AXIS Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centene Corp position performs unexpectedly, AXIS Capital 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 AXIS Capital will offset losses from the drop in AXIS Capital's long position.| Centene Corp vs. Humana Inc | Centene Corp vs. Elevance Health | Centene Corp vs. UnitedHealth Group Incorporated | Centene Corp vs. CVS Health Corp |
| AXIS Capital vs. Assured Guaranty | AXIS Capital vs. Enact Holdings | AXIS Capital vs. NMI Holdings | AXIS Capital vs. Radian Group |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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