Correlation Between Centene Corp and Oscar Health
Can any of the company-specific risk be diversified away by investing in both Centene Corp and Oscar Health 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 Oscar Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centene Corp and Oscar Health, you can compare the effects of market volatilities on Centene Corp and Oscar Health 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 Oscar Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centene Corp and Oscar Health.
Diversification Opportunities for Centene Corp and Oscar Health
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Centene and Oscar is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Centene Corp and Oscar Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oscar Health 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 Oscar Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oscar Health has no effect on the direction of Centene Corp i.e., Centene Corp and Oscar Health go up and down completely randomly.
Pair Corralation between Centene Corp and Oscar Health
Considering the 90-day investment horizon Centene Corp is expected to generate 5.25 times less return on investment than Oscar Health. But when comparing it to its historical volatility, Centene Corp is 3.02 times less risky than Oscar Health. It trades about 0.03 of its potential returns per unit of risk. Oscar Health is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,594 in Oscar Health on August 24, 2024 and sell it today you would earn a total of 37.00 from holding Oscar Health or generate 2.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centene Corp vs. Oscar Health
Performance |
| Timeline |
| Centene Corp |
| Oscar Health |
Centene Corp and Oscar Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centene Corp and Oscar Health
The main advantage of trading using opposite Centene Corp and Oscar Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centene Corp position performs unexpectedly, Oscar Health 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 Oscar Health will offset losses from the drop in Oscar Health'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 |
| Oscar Health vs. Molina Healthcare | Oscar Health vs. Centene Corp | Oscar Health vs. Elevance Health | Oscar Health vs. Clover Health Investments |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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