Correlation Between EHEALTH and Progressive Corp
Can any of the company-specific risk be diversified away by investing in both EHEALTH and Progressive Corp 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 EHEALTH and Progressive Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHEALTH and Progressive Corp, you can compare the effects of market volatilities on EHEALTH and Progressive Corp 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 EHEALTH with a short position of Progressive Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHEALTH and Progressive Corp.
Diversification Opportunities for EHEALTH and Progressive Corp
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EHEALTH and Progressive is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH and Progressive Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progressive Corp and EHEALTH 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 EHEALTH are associated (or correlated) with Progressive Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progressive Corp has no effect on the direction of EHEALTH i.e., EHEALTH and Progressive Corp go up and down completely randomly.
Pair Corralation between EHEALTH and Progressive Corp
Assuming the 90 days trading horizon EHEALTH is expected to generate 3.05 times more return on investment than Progressive Corp. However, EHEALTH is 3.05 times more volatile than Progressive Corp. It trades about 0.14 of its potential returns per unit of risk. Progressive Corp is currently generating about 0.15 per unit of risk. If you would invest 408.00 in EHEALTH on September 13, 2024 and sell it today you would earn a total of 105.00 from holding EHEALTH or generate 25.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.73% |
| Values | Daily Returns |
EHEALTH vs. Progressive Corp
Performance |
| Timeline |
| EHEALTH |
| Progressive Corp |
EHEALTH and Progressive Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHEALTH and Progressive Corp
The main advantage of trading using opposite EHEALTH and Progressive Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH position performs unexpectedly, Progressive Corp 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 Progressive Corp will offset losses from the drop in Progressive Corp's long position.| EHEALTH vs. CDN IMPERIAL BANK | EHEALTH vs. Sekisui Chemical Co | EHEALTH vs. X FAB Silicon Foundries | EHEALTH vs. Eastman Chemical |
| Progressive Corp vs. Ramsay Health Care | Progressive Corp vs. EHEALTH | Progressive Corp vs. SEKISUI CHEMICAL | Progressive Corp vs. DiamondRock Hospitality |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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