Correlation Between Joint Stock and ANTHEM

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Can any of the company-specific risk be diversified away by investing in both Joint Stock and ANTHEM 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 Joint Stock and ANTHEM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Joint Stock and ANTHEM INC, you can compare the effects of market volatilities on Joint Stock and ANTHEM 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 Joint Stock with a short position of ANTHEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joint Stock and ANTHEM.

Diversification Opportunities for Joint Stock and ANTHEM

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between Joint and ANTHEM is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Joint Stock and ANTHEM INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTHEM INC and Joint Stock 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 Joint Stock are associated (or correlated) with ANTHEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTHEM INC has no effect on the direction of Joint Stock i.e., Joint Stock and ANTHEM go up and down completely randomly.

Pair Corralation between Joint Stock and ANTHEM

Given the investment horizon of 90 days Joint Stock is expected to generate 19.41 times less return on investment than ANTHEM. But when comparing it to its historical volatility, Joint Stock is 25.07 times less risky than ANTHEM. It trades about 0.08 of its potential returns per unit of risk. ANTHEM INC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  6,945  in ANTHEM INC on September 14, 2024 and sell it today you would earn a total of  482.00  from holding ANTHEM INC or generate 6.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy80.65%
ValuesDaily Returns

Joint Stock  vs.  ANTHEM INC

 Performance 
       Timeline  
Joint Stock 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Joint Stock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.
ANTHEM INC 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in ANTHEM INC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ANTHEM is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Joint Stock and ANTHEM Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Joint Stock and ANTHEM

The main advantage of trading using opposite Joint Stock and ANTHEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Joint Stock position performs unexpectedly, ANTHEM 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 ANTHEM will offset losses from the drop in ANTHEM's long position.
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The idea behind Joint Stock and ANTHEM INC 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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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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