Correlation Between GoHealth and Ferrari NV
Can any of the company-specific risk be diversified away by investing in both GoHealth and Ferrari NV 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 Ferrari NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoHealth and Ferrari NV, you can compare the effects of market volatilities on GoHealth and Ferrari NV 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 Ferrari NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoHealth and Ferrari NV.
Diversification Opportunities for GoHealth and Ferrari NV
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GoHealth and Ferrari is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding GoHealth and Ferrari NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrari NV 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 Ferrari NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrari NV has no effect on the direction of GoHealth i.e., GoHealth and Ferrari NV go up and down completely randomly.
Pair Corralation between GoHealth and Ferrari NV
Given the investment horizon of 90 days GoHealth is expected to generate 2.27 times more return on investment than Ferrari NV. However, GoHealth is 2.27 times more volatile than Ferrari NV. It trades about 0.08 of its potential returns per unit of risk. Ferrari NV is currently generating about -0.23 per unit of risk. If you would invest 1,161 in GoHealth on August 31, 2024 and sell it today you would earn a total of 73.00 from holding GoHealth or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoHealth vs. Ferrari NV
Performance |
| Timeline |
| GoHealth |
| Ferrari NV |
GoHealth and Ferrari NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoHealth and Ferrari NV
The main advantage of trading using opposite GoHealth and Ferrari NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoHealth position performs unexpectedly, Ferrari NV 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 Ferrari NV will offset losses from the drop in Ferrari NV's long position.| GoHealth vs. eHealth | GoHealth vs. Tian Ruixiang Holdings | GoHealth vs. Huize Holding | GoHealth vs. Selectquote |
| Ferrari NV vs. Tesla Inc | Ferrari NV vs. Li Auto | Ferrari NV vs. Rivian Automotive | Ferrari NV vs. Lucid Group |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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