Correlation Between Elevance Health and Precipio
Can any of the company-specific risk be diversified away by investing in both Elevance Health and Precipio 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 Precipio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elevance Health and Precipio, you can compare the effects of market volatilities on Elevance Health and Precipio 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 Precipio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elevance Health and Precipio.
Diversification Opportunities for Elevance Health and Precipio
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elevance and Precipio is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Elevance Health and Precipio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precipio 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 Precipio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precipio has no effect on the direction of Elevance Health i.e., Elevance Health and Precipio go up and down completely randomly.
Pair Corralation between Elevance Health and Precipio
Considering the 90-day investment horizon Elevance Health is expected to under-perform the Precipio. But the stock apears to be less risky and, when comparing its historical volatility, Elevance Health is 1.19 times less risky than Precipio. The stock trades about -0.26 of its potential returns per unit of risk. The Precipio is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 641.00 in Precipio on September 12, 2024 and sell it today you would lose (41.00) from holding Precipio or give up 6.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elevance Health vs. Precipio
Performance |
| Timeline |
| Elevance Health |
| Precipio |
Elevance Health and Precipio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elevance Health and Precipio
The main advantage of trading using opposite Elevance Health and Precipio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elevance Health position performs unexpectedly, Precipio 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 Precipio will offset losses from the drop in Precipio's long position.| Elevance Health vs. Cigna Corp | Elevance Health vs. UnitedHealth Group Incorporated | Elevance Health vs. Centene Corp | Elevance Health vs. Molina Healthcare |
| Precipio vs. Biodesix | Precipio vs. Sera Prognostics | Precipio vs. Applied DNA Sciences | Precipio vs. Caredx Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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