Correlation Between Centene Corp and Concentra Group
Can any of the company-specific risk be diversified away by investing in both Centene Corp and Concentra Group 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 Concentra Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centene Corp and Concentra Group Holdings, you can compare the effects of market volatilities on Centene Corp and Concentra Group 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 Concentra Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centene Corp and Concentra Group.
Diversification Opportunities for Centene Corp and Concentra Group
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centene and Concentra is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Centene Corp and Concentra Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concentra Group 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 Concentra Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concentra Group Holdings has no effect on the direction of Centene Corp i.e., Centene Corp and Concentra Group go up and down completely randomly.
Pair Corralation between Centene Corp and Concentra Group
Considering the 90-day investment horizon Centene Corp is expected to under-perform the Concentra Group. But the stock apears to be less risky and, when comparing its historical volatility, Centene Corp is 1.18 times less risky than Concentra Group. The stock trades about -0.16 of its potential returns per unit of risk. The Concentra Group Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,961 in Concentra Group Holdings on September 12, 2024 and sell it today you would earn a total of 44.50 from holding Concentra Group Holdings or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Centene Corp vs. Concentra Group Holdings
Performance |
| Timeline |
| Centene Corp |
| Concentra Group Holdings |
Centene Corp and Concentra Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centene Corp and Concentra Group
The main advantage of trading using opposite Centene Corp and Concentra Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centene Corp position performs unexpectedly, Concentra Group 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 Concentra Group will offset losses from the drop in Concentra Group'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 |
| Concentra Group vs. Encompass Health Corp | Concentra Group vs. Pennant Group | Concentra Group vs. Acadia Healthcare | Concentra Group vs. Select Medical Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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