Correlation Between GoHealth and Maiden Holdings
Can any of the company-specific risk be diversified away by investing in both GoHealth and Maiden Holdings 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 Maiden Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoHealth and Maiden Holdings, you can compare the effects of market volatilities on GoHealth and Maiden Holdings 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 Maiden Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoHealth and Maiden Holdings.
Diversification Opportunities for GoHealth and Maiden Holdings
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GoHealth and Maiden is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding GoHealth and Maiden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden Holdings 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 Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings has no effect on the direction of GoHealth i.e., GoHealth and Maiden Holdings go up and down completely randomly.
Pair Corralation between GoHealth and Maiden Holdings
Given the investment horizon of 90 days GoHealth is expected to generate 3.45 times more return on investment than Maiden Holdings. However, GoHealth is 3.45 times more volatile than Maiden Holdings. It trades about 0.03 of its potential returns per unit of risk. Maiden Holdings is currently generating about -0.04 per unit of risk. If you would invest 1,160 in GoHealth on August 28, 2024 and sell it today you would earn a total of 6.00 from holding GoHealth or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoHealth vs. Maiden Holdings
Performance |
| Timeline |
| GoHealth |
| Maiden Holdings |
GoHealth and Maiden Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoHealth and Maiden Holdings
The main advantage of trading using opposite GoHealth and Maiden Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoHealth position performs unexpectedly, Maiden Holdings 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 Maiden Holdings will offset losses from the drop in Maiden Holdings' long position.| GoHealth vs. CorVel Corp | GoHealth vs. eHealth | GoHealth vs. Aquagold International | GoHealth vs. Morningstar Unconstrained Allocation |
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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 Directory module to find actively traded commodities issued by global exchanges.
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