Correlation Between Elevance Health and Brainsway
Can any of the company-specific risk be diversified away by investing in both Elevance Health and Brainsway 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 Elevance Health and Brainsway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elevance Health and Brainsway, you can compare the effects of market volatilities on Elevance Health and Brainsway 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 Elevance Health with a short position of Brainsway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elevance Health and Brainsway.
Diversification Opportunities for Elevance Health and Brainsway
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elevance and Brainsway is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Elevance Health and Brainsway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brainsway and Elevance Health 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 Elevance Health are associated (or correlated) with Brainsway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brainsway has no effect on the direction of Elevance Health i.e., Elevance Health and Brainsway go up and down completely randomly.
Pair Corralation between Elevance Health and Brainsway
Considering the 90-day investment horizon Elevance Health is expected to generate 0.39 times more return on investment than Brainsway. However, Elevance Health is 2.59 times less risky than Brainsway. It trades about 0.02 of its potential returns per unit of risk. Brainsway is currently generating about 0.0 per unit of risk. If you would invest 40,576 in Elevance Health on September 1, 2024 and sell it today you would earn a total of 120.00 from holding Elevance Health or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elevance Health vs. Brainsway
Performance |
| Timeline |
| Elevance Health |
| Brainsway |
Elevance Health and Brainsway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elevance Health and Brainsway
The main advantage of trading using opposite Elevance Health and Brainsway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elevance Health position performs unexpectedly, Brainsway 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 Brainsway will offset losses from the drop in Brainsway's long position.| Elevance Health vs. Cigna Corp | Elevance Health vs. UnitedHealth Group Incorporated | Elevance Health vs. Centene Corp | Elevance Health vs. Molina Healthcare |
| Brainsway vs. Profound Medical Corp | Brainsway vs. Si Bone | Brainsway vs. Nevro Corp | Brainsway vs. Paragon 28 |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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