Correlation Between EHealth and Crawford
Can any of the company-specific risk be diversified away by investing in both EHealth and Crawford 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 EHealth and Crawford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eHealth and Crawford Company, you can compare the effects of market volatilities on EHealth and Crawford 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 EHealth with a short position of Crawford. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHealth and Crawford.
Diversification Opportunities for EHealth and Crawford
Very poor diversification
The 3 months correlation between EHealth and Crawford is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding eHealth and Crawford Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crawford and EHealth 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 eHealth are associated (or correlated) with Crawford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crawford has no effect on the direction of EHealth i.e., EHealth and Crawford go up and down completely randomly.
Pair Corralation between EHealth and Crawford
Given the investment horizon of 90 days EHealth is expected to generate 1.79 times less return on investment than Crawford. In addition to that, EHealth is 1.64 times more volatile than Crawford Company. It trades about 0.04 of its total potential returns per unit of risk. Crawford Company is currently generating about 0.12 per unit of volatility. If you would invest 1,116 in Crawford Company on August 24, 2024 and sell it today you would earn a total of 64.00 from holding Crawford Company or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
eHealth vs. Crawford Company
Performance |
| Timeline |
| eHealth |
| Crawford |
EHealth and Crawford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHealth and Crawford
The main advantage of trading using opposite EHealth and Crawford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHealth position performs unexpectedly, Crawford 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 Crawford will offset losses from the drop in Crawford's long position.| EHealth vs. GoHealth | EHealth vs. Tian Ruixiang Holdings | EHealth vs. Huize Holding | EHealth vs. CorVel Corp |
| Crawford vs. CorVel Corp | Crawford vs. Erie Indemnity | Crawford vs. Willis Towers Watson | Crawford vs. Crawford Company |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Stocks Directory Find actively traded stocks across global markets |