Correlation Between GoHealth and 031162DD9

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Can any of the company-specific risk be diversified away by investing in both GoHealth and 031162DD9 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 031162DD9 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoHealth and AMGN 3 22 FEB 29, you can compare the effects of market volatilities on GoHealth and 031162DD9 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 031162DD9. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoHealth and 031162DD9.

Diversification Opportunities for GoHealth and 031162DD9

-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between GoHealth and 031162DD9 is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding GoHealth and AMGN 3 22 FEB 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMGN 3 22 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 031162DD9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMGN 3 22 has no effect on the direction of GoHealth i.e., GoHealth and 031162DD9 go up and down completely randomly.

Pair Corralation between GoHealth and 031162DD9

Given the investment horizon of 90 days GoHealth is expected to generate 7.92 times more return on investment than 031162DD9. However, GoHealth is 7.92 times more volatile than AMGN 3 22 FEB 29. It trades about 0.05 of its potential returns per unit of risk. AMGN 3 22 FEB 29 is currently generating about -0.01 per unit of risk. If you would invest  975.00  in GoHealth on September 14, 2024 and sell it today you would earn a total of  144.00  from holding GoHealth or generate 14.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy97.6%
ValuesDaily Returns

GoHealth  vs.  AMGN 3 22 FEB 29

 Performance 
       Timeline  
GoHealth 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in GoHealth are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, GoHealth displayed solid returns over the last few months and may actually be approaching a breakup point.
AMGN 3 22 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AMGN 3 22 FEB 29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 031162DD9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GoHealth and 031162DD9 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GoHealth and 031162DD9

The main advantage of trading using opposite GoHealth and 031162DD9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoHealth position performs unexpectedly, 031162DD9 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 031162DD9 will offset losses from the drop in 031162DD9's long position.
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The idea behind GoHealth and AMGN 3 22 FEB 29 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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