Correlation Between GoHealth and Erie Indemnity
Can any of the company-specific risk be diversified away by investing in both GoHealth and Erie Indemnity 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 GoHealth and Erie Indemnity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoHealth and Erie Indemnity, you can compare the effects of market volatilities on GoHealth and Erie Indemnity 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 GoHealth with a short position of Erie Indemnity. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoHealth and Erie Indemnity.
Diversification Opportunities for GoHealth and Erie Indemnity
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GoHealth and Erie is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding GoHealth and Erie Indemnity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erie Indemnity and GoHealth 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 GoHealth are associated (or correlated) with Erie Indemnity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erie Indemnity has no effect on the direction of GoHealth i.e., GoHealth and Erie Indemnity go up and down completely randomly.
Pair Corralation between GoHealth and Erie Indemnity
Given the investment horizon of 90 days GoHealth is expected to generate 2.91 times more return on investment than Erie Indemnity. However, GoHealth is 2.91 times more volatile than Erie Indemnity. It trades about 0.01 of its potential returns per unit of risk. Erie Indemnity is currently generating about 0.03 per unit of risk. If you would invest 1,346 in GoHealth on August 27, 2024 and sell it today you would lose (156.00) from holding GoHealth or give up 11.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoHealth vs. Erie Indemnity
Performance |
| Timeline |
| GoHealth |
| Erie Indemnity |
GoHealth and Erie Indemnity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoHealth and Erie Indemnity
The main advantage of trading using opposite GoHealth and Erie Indemnity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoHealth position performs unexpectedly, Erie Indemnity 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 Erie Indemnity will offset losses from the drop in Erie Indemnity's long position.| GoHealth vs. eHealth | GoHealth vs. Tian Ruixiang Holdings | GoHealth vs. Huize Holding | GoHealth vs. Selectquote |
| Erie Indemnity vs. CorVel Corp | Erie Indemnity vs. eHealth | Erie Indemnity vs. Aquagold International | Erie Indemnity vs. Morningstar Unconstrained Allocation |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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