Correlation Between Centene Corp and Brown Brown
Can any of the company-specific risk be diversified away by investing in both Centene Corp and Brown Brown 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 Brown Brown into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centene Corp and Brown Brown, you can compare the effects of market volatilities on Centene Corp and Brown Brown 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 Brown Brown. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centene Corp and Brown Brown.
Diversification Opportunities for Centene Corp and Brown Brown
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centene and Brown is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Centene Corp and Brown Brown in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Brown 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 Brown Brown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brown Brown has no effect on the direction of Centene Corp i.e., Centene Corp and Brown Brown go up and down completely randomly.
Pair Corralation between Centene Corp and Brown Brown
Considering the 90-day investment horizon Centene Corp is expected to under-perform the Brown Brown. In addition to that, Centene Corp is 1.57 times more volatile than Brown Brown. It trades about -0.01 of its total potential returns per unit of risk. Brown Brown is currently generating about 0.0 per unit of volatility. If you would invest 11,304 in Brown Brown on November 27, 2024 and sell it today you would lose (44.00) from holding Brown Brown or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centene Corp vs. Brown Brown
Performance |
| Timeline |
| Centene Corp |
| Brown Brown |
Centene Corp and Brown Brown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centene Corp and Brown Brown
The main advantage of trading using opposite Centene Corp and Brown Brown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centene Corp position performs unexpectedly, Brown Brown 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 Brown Brown will offset losses from the drop in Brown Brown'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 |
| Brown Brown vs. Marsh McLennan Companies | Brown Brown vs. Aon PLC | Brown Brown vs. Willis Towers Watson | Brown Brown vs. Erie Indemnity |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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